Australian Broker Call *Extra* Edition – Oct 19, 2021

Daily Market Reports | Oct 19 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)

ABY   AMA (2)   ANZ   AOF   API   ASB   BXB   CBO   CGS   CLW   CRW   CU6   CXL   DGL   DMP   ELD   FFX   GOR   HVN   IRE   KMD   LBL   LDX   NHC   OPY   ORE   PFP   SLX (2)   STA   SYD   TCL   TLX   VML   WPR  

AOF    AUSTRALIAN UNITY OFFICE FUND

REITs - Overnight Price: $2.38

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

Australian Unity Office Fund has announced a potential merger with Australian Unity's Diversified Property Fund, at a merger ratio of 54%-46%. Further details on the implementation of the deal are expected in October. 

This agreement would give Australian Unity Office Fund shareholders a $397m stake, and Australian Unity's Diversified Property Fund shareholders a $337m stake. Moelis notes the merger would give Australian Unity Office Fund exposure to more diverse assets.

The Hold rating and target price of $2.37 are retained. 

This report was published on September 21, 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

API    AUSTRALIAN PHARMACEUTICAL INDUSTRIES LIMITED

Health & Nutrition - Overnight Price: $1.53

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

Bell Potter reports the Wesfarmer's ((WES)) revised all-cash non-binding indicative $1.55 a share bid for Australian Pharmaceutical Industries (a total enterprise value of roughly $964m depending on debt) represents a 12% premium to the previous bid of $1.38.

The bid price will be reduced by the value of the final dividend for FY21 and the broker considers it fair and reasonable given  the lockdown hit to earnings.

Hold rating retained. Target price rises to $1.53 from $1.38.

This report was published on September 16, 2021.

Target price is $1.53 Current Price is $1.53 Difference: $0
If API meets the Bell Potter target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $1.49, suggesting downside of -2.4%(ex-dividends)
The company's fiscal year ends in August.

Forecast for FY21:

Bell Potter 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 1.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.6, implying annual growth of N/A.
Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 3.80 cents and EPS of 7.60 cents.
At the last closing share price the estimated dividend yield is 2.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.3, implying annual growth of 22.4%.
Current consensus DPS estimate is 6.9, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 16.5.

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

ASB    AUSTAL LIMITED

Commercial Services & Supplies - Overnight Price: $1.90

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

Shaw and Partners believes the investment case remains the same for Austal, This is despite a material share price fall in the wake of FY21 results on August 24, which were thought to provide little new information.

The company has circa two years of work in hand, and hence must win material new orders in the next 12-18 months, explains the analyst. However, it's believed the yards will secure sufficient work to remain at a high level of utilisation.

The broker maintains its Buy rating and lowers its target price to $2.75 from $2.80.

This report was published on September 20, 2021.

Target price is $2.75 Current Price is $1.90 Difference: $0.85
If ASB meets the Shaw and Partners target it will return approximately 45% (excluding dividends, fees and charges).
Current consensus price target is $2.56, suggesting upside of 36.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 8.00 cents and EPS of 19.30 cents.
At the last closing share price the estimated dividend yield is 4.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.1, implying annual growth of -15.3%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 9.8.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 9.00 cents and EPS of 22.10 cents.
At the last closing share price the estimated dividend yield is 4.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.3, implying annual growth of -9.4%.
Current consensus DPS estimate is 8.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 10.9.

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

BXB    BRAMBLES LIMITED

Transportation & Logistics - Overnight Price: $10.15

Jarden rates ((BXB)) as Underweight (2) -

Although lumber inflation is showing signs of easing, Jarden notes this is not currently reflected in pallet pricing likely to allow for short-term margin support, which may not be sustainable as capacity returns, in the broker's view.

Additionally, Jarden highlighted other costs, including freight and fuel, remain elevated. The Underweight rating and target price of $11.60 are retained.

This report was published on September 17, 2021.

Target price is $11.60 Current Price is $10.15 Difference: $1.45
If BXB meets the Jarden target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $12.60, suggesting upside of 21.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 48.08 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.1, implying annual growth of N/A.
Current consensus DPS estimate is 30.3, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 18.5.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 50.87 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 61.3, implying annual growth of 9.3%.
Current consensus DPS estimate is 33.9, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 16.9.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CBO    COBRAM ESTATE OLIVES LIMITED

Agriculture - Overnight Price: $2.05

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

Bell Potter explains that higher import parity prices have the potential to drive category shelf price inflation, while creating a higher value outlet for additional bulk sales. It's noted both import parity pricing and competing vegetable oil pricing have improved.

The broker maintains its earnings forecasts, $2.30 target price and its Buy rating for Cobram Estate Olives.

This report was published on September 22, 2021.

Target price is $2.30 Current Price is $2.05 Difference: $0.25
If CBO meets the Bell Potter target it will return approximately 12% (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 3.30 cents and EPS of 0.10 cents.
At the last closing share price the estimated dividend yield is 1.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2050.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 3.30 cents and EPS of 10.60 cents.
At the last closing share price the estimated dividend yield is 1.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.34.

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

CGS    COGSTATE LIMITED

Medical Equipment & Devices - Overnight Price: $2.38

CCZ Equities rates ((CGS)) as No Rating (-1) -

CCZ Equities perceives considerable upside for global cognitive science company Cogstate. The company uses computerised cognitive assessment technology to support clinical trials, healthcare segments and academic research.

The broker notes the FDA has been supporting new treatments for Alzheimer's disease and expects an acceleration in drug approvals.

Cogstate's sales rose 15% in FY21 to a record high and management forecasts compound annual revenue growth at 32.6%.

The company is leveraging global opportunities, partnering with Eisaid to commercialise its use in clinical settings in Japan, US, Europe and China, reports the broker. These agreements include $16m in upfront payments, profit share for Japan and $30m minimum royalties over 10 years (the broker expects royalties will outpace the minimum post 2023).

CCZ Equities spies a $495.5m valuation ($2.88 a share) - a roughly 44% premium to the share price; and expects extra royalties could drive further returns.

This report was published on September 16, 2021.

Current Price is $2.38. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY22:

CCZ Equities forecasts a full year FY22 dividend of 0.00 cents and EPS of 4.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 59.06.

Forecast for FY23:

CCZ Equities forecasts a full year FY23 dividend of 0.00 cents and EPS of 5.32 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 44.74.

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


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