Australian Broker Call *Extra* Edition – Oct 27, 2021

Daily Market Reports | Oct 27 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)

ABB   ARX   AUT   AWC   BHP   BRL   BSX   CIA   CRN   CYG   DRR   FMG   GPR   ILU   LPD   MZZ   NCK   NHC   OPY   OZL   PME   RIO   S32   SFR (2)   SLX   STA   WHC  

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $1.16

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

First half revenues for Aroa Biosurgery were 13% ahead of Bell Potter's forecast. Gross margin improvement was largely derived from the Morcells lyophilized product. The analyst is increasingly confident of a full-year beat, despite conservatism from management.

The broker suggests the introduction of the Myriad surgical product into the Healthtrust group purchasing organisation (GPO) is a very positive development. This potentially provides access to 1,500 new hospitals.

The Speculative Buy rating and target price of $1.90 are retained. 

This report was published on October 7, 2021.

Target price is $1.90 Current Price is $1.16 Difference: $0.74
If ARX meets the Bell Potter target it will return approximately 64% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 52.73.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 52.73.

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

AUT    AUTECO MINERALS LIMITED

Gold & Silver - Overnight Price: $0.08

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

Shaw and Partners notes resource upgrades to Auteco Minerals' Pickle Crow project can be expected in early 2022 following the discovery of a new high-grade gold vein system outside the existing 1.7m ounce resource.

The broker notes this follows the recent 71% increase in resource at Pickle Crow. Drilling programs will focus on delineating the extent of these new Tyson veins but in Shaw and Partners' view a resource increase to over 2m ounces is likely.

The Buy rating and target price of $0.21 are retained. 

This report was published on October 6, 2021.

Target price is $0.21 Current Price is $0.08 Difference: $0.13
If AUT meets the Shaw and Partners target it will return approximately 163% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.43.

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: $2.06

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

Goldman Sachs has updated estimates across its Australian metals and mining sector coverage. Analysts have downgraded iron ore forecasts on a slowing Chinese property construction market.

However, an expected increase in Chinese property completions in 2022 has driven a more positive outlook for aluminium, copper and zircon. The broker also remains positive on the near-term outlook for thermal and met coal, and has upgraded alumina and oil pricing.

The Neutral rating is retained and the target price increases to $2.20 from $1.80.

This report was published on October 6, 2021.

Target price is $2.20 Current Price is $2.06 Difference: $0.14
If AWC meets the Goldman Sachs target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $2.09, suggesting downside of -0.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 EPS of 10.22 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.3, implying annual growth of N/A.
Current consensus DPS estimate is 11.9, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 17.2.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 18.18 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.0, implying annual growth of 38.2%.
Current consensus DPS estimate is 18.3, implying a prospective dividend yield of 8.7%.
Current consensus EPS estimate suggests the PER is 12.4.

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

BHP    BHP GROUP LIMITED

Bulks - Overnight Price: $38.21

Goldman Sachs rates ((BHP)) as No Rating (-1) -

Goldman Sachs has updated estimates across its Australian metals and mining sector coverage. Analysts have downgraded iron ore forecasts on a slowing Chinese property construction market.

However, an expected increase in Chinese property completions in 2022 has driven a more positive outlook for aluminium, copper and zircon. The broker also remains positive on the near-term outlook for thermal and met coal, and has upgraded alumina and oil pricing.

Goldman Sachs remains not rated on BHP Group.

This report was published on October 6, 2021.

Current Price is $38.21. Target price not assessed.
Current consensus price target is $44.26, suggesting upside of 17.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 531.97 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 495.6, implying annual growth of N/A.
Current consensus DPS estimate is 355.2, implying a prospective dividend yield of 9.4%.
Current consensus EPS estimate suggests the PER is 7.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 478.91 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 393.0, implying annual growth of -20.7%.
Current consensus DPS estimate is 283.2, implying a prospective dividend yield of 7.5%.
Current consensus EPS estimate suggests the PER is 9.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BRL    BATHURST RESOURCES LIMITED

Coal - Overnight Price: $0.84

Bell Potter rates ((BRL)) as Speculative Hold (3) -

Not only did Bathurst Resources upgrade guidance on met coal leverage, but also the company has significantly reduced balance sheet risk, according to Bell Potter. This was due to a win on appeal against a US$40m performance payment claim.

While a further claim for the same amount is in arbitration, management believes this may also be defended. The analyst's forecasts don't include an adverse outcome.

The target price rises to $0.98 from $0.60 and the Speculative Hold rating is unchanged.

This report was published on October 7, 2021.

Target price is $0.98 Current Price is $0.84 Difference: $0.14
If BRL meets the Bell Potter target it will return approximately 17% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 EPS of 39.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.11.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 11.27 cents and EPS of 23.20 cents.
At the last closing share price the estimated dividend yield is 13.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.62.

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

BSX    BLACKSTONE MINERALS LIMITED

New Battery Elements - Overnight Price: $0.71

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

In Shaw and Partners' view positive results coming from drilling programs at Blackstone Minerals' Ta Khoa project will increase confidence in the upstream resource, and likely benefit the company with more development flexibility for its downstream refining business. 

Additionally, the company noted a collaboration with the Vietnamese government to explore further nickel opportunities which may be indicative of alignment between the company and government and may resolve some investor concerns. 

The Buy rating and target price of $1.90 are retained. 

This report was published on October 6, 2021.

Target price is $1.90 Current Price is $0.71 Difference: $1.19
If BSX meets the Shaw and Partners target it will return approximately 168% (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 0.00 cents and EPS of minus 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 33.81.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 4.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.14.

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