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

Daily Market Reports | Nov 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)

ABB   ADH   AHX   AND   APC   APZ   ARB   AT1   BPT   COF   CSS   CUP   CXO   DMP (2)   ELD   ELO   ENN   ERD   ESK   EVN   FCL   GNX   HUB   IGO   IMR   JHG   KGN   LRK   MSB   NST   OZL   PGL   PLY   PNR   RDY (2)   S32   SMP   SUL   TLS   TSI  

PNR    PANTORO LIMITED

Gold & Silver - Overnight Price: $0.22

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

Pantoro's September-quarter record production outpaced Bell Potter's estimates but all-in-sustaining costs disappointed, falling at the low end of guidance.

The broker says the strong mill throughput, combined with 95.4% metallurgical recoveries helped manage costs pressures arising from a tight labour market and covid disruptions. 

The Norseman Gold Project recently received key permits and approvals and the 47-week construction has started.

The broker says the company recently acquired a $30m corporate debt facility - a three-year term loan at 7% - which should provide a buffer against inflation.

EY22 earnings forecasts are downgraded -14% to reflect the debt facility and higher depreciation and amortisation. FY23 and FY24 earnings rise 4% and 3% to reflect an easing in forecast costs.

Buy rating retained. Target price rises to 30c from 27c.

This report was published on October 22, 2021.

Target price is $0.30 Current Price is $0.22 Difference: $0.08
If PNR meets the Bell Potter target it will return approximately 36% (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 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.33.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.86.

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

RDY    READYTECH HOLDINGS LIMITED

Software & Services - Overnight Price: $4.20

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

Shaw & Partners reiterates its Buy rating and $3.80 target price for ReadyTech Holdings following a management presentation on ReadyTech's Workforce Solutions division.

Stand-outs from the presentation included a demonstration of the the company's targeted product market fit; expanding enterprise reach; and scope of opportunity with new and existing customer segments.

This report was published on October 22, 2021.

Target price is $3.80 Current Price is $4.20 Difference: minus $0.4 (current price is over target).
If RDY meets the Shaw and Partners target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 14.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.77.

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


Wilsons rates ((RDY)) as Overweight (1) -

ReadyTech Holdings is expecting investment into research and development will drive strong medium-term growth for the company, and Wilsons notes recent competitive behaviour has increased conviction in Open Office medium-term opportunity. 

Highlights for the broker included an identified $2.4bn market opportunity across six key verticals, and material opportunity to up-sell existing HR3 customers. 

The Overweight rating and target price of $4.04 are retained. 

This report was published on October 22, 2021.

Target price is $4.04 Current Price is $4.20 Difference: minus $0.16 (current price is over target).
If RDY meets the Wilsons target it will return approximately minus 4% (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 0.00 cents and EPS of 13.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.22.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 6.30 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 1.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.58.

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

S32    SOUTH32 LIMITED

Mining - Overnight Price: $3.53

Shaw and Partners rates ((S32)) as Buy (1) -

South 32's September-quarter result pleased the broker; the company meeting guidance, achieving significant M&A acquisition and divestment targets, and advancing project studies.

Shaw & Partners says South 32's one-year, three-year and and five-year growth trajectory is solidifying and is more robust than the broker can remember. The company reported record manganese production and better alumina production.

The broker expects a slew of results this financial year, spies good cash generation, an improved portfolio balance after the thermal coal exit, strong capital management and deleveraging.

Buy rating retained, Shaw considering South32 the cheapest big miner and cheaper than "future-facing" commodity peers. Target price rises to $5 from $3.80.

This research was published on October 22, 2021.

Target price is $5.00 Current Price is $3.53 Difference: $1.47
If S32 meets the Shaw and Partners target it will return approximately 42% (excluding dividends, fees and charges).
Current consensus price target is $4.41, suggesting upside of 25.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 31.00 cents and EPS of 56.96 cents.
At the last closing share price the estimated dividend yield is 8.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.5, implying annual growth of N/A.
Current consensus DPS estimate is 27.9, implying a prospective dividend yield of 7.9%.
Current consensus EPS estimate suggests the PER is 6.0.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 20.80 cents and EPS of 39.08 cents.
At the last closing share price the estimated dividend yield is 5.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.0, implying annual growth of -21.4%.
Current consensus DPS estimate is 22.1, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 7.7.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SMP    SMARTPAY HOLDINGS LIMITED

Business & Consumer Credit - Overnight Price: $0.81

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

Smartpay's September-quarter results outpaced the broker thanks to record revenues per transacting terminal and general market outperformance during lockdowns, after consumers embarked on a record October spending spree.

The broker says Smartpay is well positioned to benefit from re-opening; is experiencing low churn; and the NZ business is robust.

The sum-of-the-parts exceeds the whole, the broker noting the Australian business alone exceeds SMP's entire valuation.

Earnings forecasts rise 2.7%, 1.6%, and 1.3% across FY22, FY23 and FY24, and the broker adjusts currency assumptions.

Target price rises to $1.15 from $1.12. Buy rating retained.

This report was published on October 22, 2021.

Target price is $1.15 Current Price is $0.81 Difference: $0.34
If SMP meets the Shaw and Partners target it will return approximately 42% (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 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.86.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 3.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.35.

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

SUL    SUPER RETAIL GROUP LIMITED

Automobiles & Components - Overnight Price: $13.35

Jarden rates ((SUL)) as Underweight (4) -

Super Retail Group's September-quarter trading update outpaced Jarden (which trailed visible Alpha consensus by -16%).

Like-for-like sales fell and management guided to growing margin pressure, which the broker expects will lead to a cut in consensus margins.

The broker notes the company has a higher inventory than peers, which may protect against supply-chain disruption but increases risk.

Jarden raises FY21 EPS 5%. Underweight rating retained, the broker noting costs are rising faster than investment. Target price rises to $11.70 from $11.60.

 This report was published on October 20, 2021.

Target price is $11.70 Current Price is $13.35 Difference: minus $1.65 (current price is over target).
If SUL meets the Jarden target it will return approximately minus 12% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $14.07, suggesting upside of 5.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 54.00 cents and EPS of 82.80 cents.
At the last closing share price the estimated dividend yield is 4.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.4, implying annual growth of -29.3%.
Current consensus DPS estimate is 62.2, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 14.2.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 52.00 cents and EPS of 79.90 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 16.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 90.8, implying annual growth of -3.8%.
Current consensus DPS estimate is 59.5, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 14.7.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

TLS    TELSTRA CORPORATION LIMITED

Telecommunication - Overnight Price: $3.93

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

Telstra highlights the -$270m investment in Digicel Pacific alongside the Australian government meets all of the company's M&A criteria. Goldman Sachs notes the acquired business has had a strong earnings (EBITDA) margin of 54% in FY21.

The analyst estimates the transaction will contribute only 4% of FY21 pro forma underlying earnings (EBITDA) for Telstra. The broker retains its Buy rating and $4.40 target price.

This report was published on October 25, 2021.

Target price is $4.40 Current Price is $3.93 Difference: $0.47
If TLS meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $4.41, suggesting upside of 11.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 16.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 4.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.5, implying annual growth of -13.7%.
Current consensus DPS estimate is 16.0, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 29.3.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 16.00 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 4.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.9, implying annual growth of 17.8%.
Current consensus DPS estimate is 16.0, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 24.8.

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

TSI    TOP SHELF INTERNATIONAL HOLDINGS LIMITED

Food, Beverages & Tobacco - Overnight Price: $1.64

Wilsons rates ((TSI)) as Overweight (1) -

Wilsons has described Top Shelf International Holdings' soft first quarter result as understandable, pointing to the availability of NED Whisky and stalled on-premise momentum for Grainshaker as impacting on revenue, which was down -46% quarter-on-quarter.

The company has announced a $35m equity raising to fund growth in both brands and support the construction of an agave spirit production facility, which the broker notes has potential to attract government grant funding.

Wilsons decreases sales forecasts -10% and -17% for FY22 and FY23 given expected timing of Agave and Grainshaker sales acceleration.

The Overweight rating is retained and the target price decreases to $2.16 from $2.87.

This report was published on October 22, 2021.

Target price is $2.16 Current Price is $1.64 Difference: $0.52
If TSI meets the Wilsons target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 16.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.00.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 9.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 18.02.

Market Sentiment: 1.0
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.


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