Australian Broker Call *Extra* Edition – Sep 29, 2021

Daily Market Reports | Sep 29 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)

360   A2M   ACL   AIM   AOF   APX   AWC   BGA   BST   CAJ   CCX   CGC (2)   CUV   DTC   ERF   FCL (2)   FLT   GDC (2)   GDG   GOZ   HPG   HUO   IDX (2)   IGL (2)   ILU   IMR (2)   JIN   LYL   MAH   MAQ   MGH   MLG   MVP   MYX   NIC (2)   NSR   NST   NXT (2)   OPY   PBP   PFP   PNV   PPG (2)   RFG   RMS   RMY   SLA   SLH   SLK   SSM   ST1   SXE   UNI   VVA   WHC (2)   WPR   WSP (2)   WTC   WZR   Z1P  

ACL    AUSTRALIAN CLINICAL LABS LIMITED

Healthcare services - Overnight Price: $4.68

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

Australian Clinical Labs delivered solid FY21 results, reporting a 2% revenue beat and an 11% profit after tax beat on guidance. 

Goldman Sachs notes not only was the result driven by sustained demand for covid testing, but base revenue was also up 14% in the second half. The company expects margins to settle above 27% as covid volumes decrease. 

The broker updates FY22 sales and profit after tax forecasts by 12% and 65% respectively. 

The Buy rating is retained and the target price increases to $5.50 from $4.80.

This report was published on August 27, 2021. 

Target price is $5.50 Current Price is $4.68 Difference: $0.82
If ACL meets the Goldman Sachs target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 36.00 cents and EPS of 60.00 cents.
At the last closing share price the estimated dividend yield is 7.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.80.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 17.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 3.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.71.

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

AIM    AI-MEDIA TECHNOLOGIES LIMITED

Commercial Services & Supplies - Overnight Price: $0.92

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

AI-Media Technologies delivered a smaller loss in its maiden result than expected.

The core business, not including acquisitions, exceeded prospectus forecasts from both a revenue and earnings perspective, Bell Potter notes. The key driver of the beat was stronger than expected organic revenue growth despite currency headwinds.

The result reflects an important milestone for management’s execution over the past twelve months, but the broker's focus is now on how the company is set up for a transformational year of growth in FY22.

Buy and $1.50 target retained.

This report was published on August 27, 2021.

Target price is $1.50 Current Price is $0.92 Difference: $0.58
If AIM meets the Bell Potter target it will return approximately 63% (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 0.00 cents and EPS of 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.81.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 3.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.59.

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

AOF    AUSTRALIAN UNITY OFFICE FUND

REITs - Overnight Price: $2.38

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

Australian Unity Office Fund reported FY21 results at the top end of guidance. FY22 guidance is for FFO in a range of 18-18.5c per unit and distributions of 15.2c per unit.

The acquisition of 96 York Street, Beenleigh, Queensland, for $34m with a 10-year WALE and the potential disposal of 32 Philip Street, Parramatta, with a book value of $63m will slightly increase the WALE and reduce gearing.

Moelis is cautious about the valuation despite an apparent -10% discount to net tangible assets, given some income risks. The broker assumes a -27% reduction in earnings between FY21-24 without the disposal of 32 Philip Street.

Hold rating retained. Target is reduced to $2.37 from $2.44.

This report was published on August 27, 2021.

Target price is $2.37 Current Price is $2.38 Difference: minus $0.01 (current price is over target).
If AOF meets the Moelis target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 15.20 cents and EPS of 18.70 cents.
At the last closing share price the estimated dividend yield is 6.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.73.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 13.50 cents and EPS of 15.70 cents.
At the last closing share price the estimated dividend yield is 5.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.16.

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

APX    APPEN LIMITED

IT & Support - Overnight Price: $9.12

Bell Potter rates ((APX)) as Hold (3) -

Appen's first half loss was a lot greater than Bell Potter's forecast on lower than expected revenues and margins. Cash flow was relatively weak although the dividend was in line.

Full-year guidance is downgraded on a combination of "ad-related project impacts" and the cost of the acquisition of Quadrant -- a global leader in mobile location and point-of-interest data.

The broker cuts earnings forecasts to the low end of the guidance range but warns this still requires a strong second half. Target falls to $11.50 from $13.50, Hold retained.

This report was released on August 27, 2021.

Target price is $11.50 Current Price is $9.12 Difference: $2.38
If APX meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $13.78, suggesting upside of 51.0%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 10.00 cents and EPS of 46.20 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.9, implying annual growth of -16.0%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 11.00 cents and EPS of 52.40 cents.
At the last closing share price the estimated dividend yield is 1.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.8, implying annual growth of 28.4%.
Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 20.4.

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

AWC    ALUMINA LIMITED

Aluminium, Bauxite & Alumina - Overnight Price: $2.17

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

Most factors pertaining to the alumina price, costs and capex spend/timing had been flagged prior to first half results by Alcoa/Alumina Ltd, explains Shaw and Partners. The dividend of US$3.4cps was considered in-line with expectations.

The second half dividend will depend on the API alumina price, explains the analyst.  Also, second half capex is expected to be around -$70m higher than the first half (100% joint venture basis), which would trim cash available for dividends by -US$1cps.

Alcoa guided to an API price “now higher than the second quarter" though noted ongoing cost inflation across energy, caustic soda and freight. Shaw and Partners retains its Buy rating and $2.20 target price.

This report was published on August 26, 2021.

Target price is $2.20 Current Price is $2.17 Difference: $0.03
If AWC meets the Shaw and Partners target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $1.86, suggesting downside of -14.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 10.50 cents and EPS of 7.18 cents.
At the last closing share price the estimated dividend yield is 4.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.7, implying annual growth of N/A.
Current consensus DPS estimate is 8.7, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 28.2.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 9.31 cents and EPS of 9.17 cents.
At the last closing share price the estimated dividend yield is 4.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.0, implying annual growth of 29.9%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 21.7.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BGA    BEGA CHEESE LIMITED

Dairy - Overnight Price: $5.26

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

FY21 results were ahead of expectations. No quantitative FY22 guidance was provided although management signalled the farmgate environment was increasingly competitive, which Goldman Sachs flags may create a headwind to margins.

Branded sales increased to 73% of the portfolio. Goldman Sachs notes the dairy commodity pricing backdrop is improving and this, if it continues, could allow the business to recover higher farmgate milk prices into FY22.

Neutral rating and $6.40 target maintained.

This report was published on August 27, 2021.

Target price is $6.40 Current Price is $5.26 Difference: $1.14
If BGA meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
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 29.00 cents.
At the last closing share price the estimated dividend yield is 2.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.14.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 31.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.97.

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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