Australian Broker Call *Extra* Edition – Oct 05, 2021

Daily Market Reports | Oct 05 2021

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)

A4N   ABB   ABY   AHX   ALU (2)   ASG   BET   BKG   BUB   CBR   CTT   CXL   DDH   DEG   FFX   FMG (2)   GNP   HMY   HUO   HVN (2)   IGO   IVC (2)   LDX   LGP   MCR   NXS   PBH   PDN   REG (2)   RRL   SGH   SHV   SRG   WBC   WEB   WOA  

REG    REGIS HEALTHCARE LIMITED

Aged Care & Seniors - Overnight Price: $2.00

Jarden rates ((REG)) as Upgrade to Buy from Overweight (1) -

Net profit in FY21 beat expectations because of property revaluations. Jarden notes this was a tough year for the company because of the pandemic and associated occupancy pressures.

The broker believes the operating and funding environment for aged care is in a trough and higher earnings from improved asset utilisation and fundamentals will occur.

Cash conversion is expected to outperform EPS growth and RAD cash flows benefit from increased occupancy and tighter supply of quality beds. Rating is upgraded to Buy from Overweight and the target lifted to $3.02 from $2.64.

This report was published on August 31, 2021.

Target price is $3.02 Current Price is $2.00 Difference: $1.02
If REG meets the Jarden target it will return approximately 51% (excluding dividends, fees and charges).
Current consensus price target is $2.27, suggesting upside of 13.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 6.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.4, implying annual growth of 26.7%.
Current consensus DPS estimate is 7.6, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 7.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.6, implying annual growth of 26.2%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 18.9.

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


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

While Regis Healthcare's full-year underlying earnings of $73.5m were a -10% miss on Moelis' forecasts, the broker is forecasting underlying earnings of $147m for FY22. Moelis noted $7.1m in expenses related to employee underpayments drove the earnings miss.

Despite remaining historically low, average occupancy for Regis Healthcare increased during the second half of FY21 to 89.6%. FY22 forecasts suggest a 1.5 percentage point improvement to average occupancy of 90.5%. 

The Buy rating is retained and the target price increases to $2.56 from $2.23.

This report was published on September 1, 2021. 

Target price is $2.56 Current Price is $2.00 Difference: $0.56
If REG meets the Moelis target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $2.27, suggesting upside of 13.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 49.50 cents and EPS of 8.20 cents.
At the last closing share price the estimated dividend yield is 24.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.4, implying annual growth of 26.7%.
Current consensus DPS estimate is 7.6, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 51.90 cents and EPS of 11.80 cents.
At the last closing share price the estimated dividend yield is 25.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 10.6, implying annual growth of 26.2%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 18.9.

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

RRL    REGIS RESOURCES LIMITED

Gold & Silver - Overnight Price: $2.07

Goldman Sachs rates ((RRL)) as Sell (5) -

FY21 results were slightly ahead of expectations while FY22 guidance is unchanged and Goldman Sachs reduces FY22-24 estimates by -4-12%.

The broker notes no tangible progress on the McPhillamys approvals and, given the risk, along with reduced gold price leverage from a hedge book that is out of the money, a Sell rating is maintained. Target is $2.50.

This report was published on August 31, 2021.

Target price is $2.50 Current Price is $2.07 Difference: $0.43
If RRL meets the Goldman Sachs target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $3.13, suggesting upside of 51.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 6.00 cents and EPS of 27.30 cents.
At the last closing share price the estimated dividend yield is 2.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of -3.7%.
Current consensus DPS estimate is 8.7, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 8.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 6.00 cents and EPS of 27.50 cents.
At the last closing share price the estimated dividend yield is 2.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.0, implying annual growth of -1.6%.
Current consensus DPS estimate is 7.2, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 8.3.

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

SGH    SLATER & GORDON LIMITED

Legal - Overnight Price: $0.78

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

Following FY21 results, Moelis increases FY22-24 EPS forecasts on an estimated rise in operating margins, while also adopting a conservative approach, given the limited visibility for case settlements. 

Gross revenue and earnings (EBITDA) were a beat of 3.4% and 56.1% versus the broker's estimates, resulting from organic growth after a significant digital capability outlay. Management noted future potential covid-impacts upon fees billed and cash flows.

Moelis lifts its target price to $1.07 from $1.03 and retains its Buy rating.

This report was published on August 31, 2021.

Target price is $1.07 Current Price is $0.78 Difference: $0.29
If SGH meets the Moelis target it will return approximately 37% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 0.00 cents and EPS of 13.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.00.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of 14.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.38.

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

SHV    SELECT HARVESTS LIMITED

Agriculture - Overnight Price: $8.23

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

After updating forecasts to reflect pricing in the spot market, Bell Potter upgrades FY21-23 profit estimates by 133%, 16% and 3%, respectively. The target price rises to $8.50 from $7.35. Management guided to unchanged 2021 crop forecast.

The company also announced the sale of its Lucky and Sunsol brands for $1.5m plus finished good inventory of circa $7.5m.

While conditions in California have driven the almond price so far, the snow pack formation over January to April 2022 will determine whether prices are sustainable, explains the analyst. The Hold rating remains unchanged.

This report was published on August 31, 2021.

Target price is $8.50 Current Price is $8.23 Difference: $0.27
If SHV meets the Bell Potter target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in September.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 9.00 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 1.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 46.50.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 20.00 cents and EPS of 37.60 cents.
At the last closing share price the estimated dividend yield is 2.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.89.

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

SRG    SRG GLOBAL LIMITED

Mining Sector Contracting - Overnight Price: $0.50

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

SRG Global's FY21 results revealed a 61% year-on-year underlying earnings increase, with the total $47.1m a small beat on Shaw and Partners' forecast. 

The company moves into FY22 with $1bn work in hand, and a $6bn opportunity pipeline, with an expected 15% underlying earnings growth. The broker noted SRG Global ended the year with $12.2m in net cash, compared to $8.4m net debt at the end of FY20.

It is the broker's view that SRG Global is less exposed to cost and wage inflation than competitors. The Buy rating and target price of $0.75 are retained. 

This report was published on August 30, 2021.

Target price is $0.75 Current Price is $0.50 Difference: $0.25
If SRG meets the Shaw and Partners target it will return approximately 50% (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 2.50 cents and EPS of 4.30 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 11.63.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 3.00 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 6.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.62.

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

WBC    WESTPAC BANKING CORPORATION

Banks - Overnight Price: $25.95

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

Westpac has completed the sale of its lenders mortgage insurance business to Arch Capital. Bell Potter notes the transaction simplifies the business portfolio and allows more of the bank's customers into home ownership.

The parties have entered into an exclusive 10-year supply agreement. There is no change to earnings projections yet Bell Potter increases the target to $27.50 from $27.00. Hold maintained.

This report was published on August 31, 2021.

Target price is $27.50 Current Price is $25.95 Difference: $1.55
If WBC meets the Bell Potter target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $28.37, suggesting upside of 9.3%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 112.00 cents and EPS of 178.00 cents.
At the last closing share price the estimated dividend yield is 4.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 172.0, implying annual growth of 169.9%.
Current consensus DPS estimate is 115.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 15.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 124.00 cents and EPS of 184.00 cents.
At the last closing share price the estimated dividend yield is 4.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 183.3, implying annual growth of 6.6%.
Current consensus DPS estimate is 127.3, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 14.2.

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

WEB    WEBJET LIMITED

Travel, Leisure & Tourism - Overnight Price: $6.66

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

Ahead of its AGM, Webjet has indicated its Online Republic and online travel agency (OTA) businesses have been affected by the lockdowns in Australasia.

Importantly, Goldman Sachs notes the WebBeds business was profitable over July and August amid strong demand in North America and Europe.

WebBeds has also improved the mix of local business to 46% over April to July. The broker retains a Buy rating with a $6.40 target.

This report was published on August 31, 2021.

Target price is $6.40 Current Price is $6.66 Difference: minus $0.26 (current price is over target).
If WEB meets the Goldman Sachs target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $6.09, suggesting downside of -8.5%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 74.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -6.5, 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 N/A.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 17.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.6, implying annual growth of N/A.
Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 30.8.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

WOA    WIDE OPEN AGRICULTURE LIMITED

Food, Beverages & Tobacco - Overnight Price: $0.70

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

Revenue was up 198% in FY21 although margins were slightly lower than expected. Euroz Hartleys attributes this to higher input costs that were not passed on to the consumer.

Margins are expected to improve throughout FY22 as prices are increased amid a growing contribution from OatUP and other higher margin products.

The broker has a Speculative Buy rating and $1.50 target.

This report was published on September 1, 2021.

Target price is $1.50 Current Price is $0.70 Difference: $0.8
If WOA meets the Euroz Hartleys target it will return approximately 114% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

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


Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.


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