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Australian Broker Call *Extra* Edition – Nov 17, 2021

Daily Market Reports | Nov 17 2021

This story features LIFE360, INC, and other companies. For more info SHARE ANALYSIS: 360

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   ABY   ACL   CXO   DGL   ELD (3)   JAN   NTO   OPY   RHC   SLC   SLH   XRO  

360    LIFE360, INC

Software & Services – Overnight Price: $13.60

Bell Potter rates ((360)) as Buy (1) –

After the recent listing by US competitor Nextdoor, Bell Potter feels a higher multiple should be ascribed to Life360. This is because the company generates most of its revenue via higher-quality subscription versus Nextdoor's advertising-based model.

This point has added resonance when one contemplates Life360 intends listing in the US sometime next year. Taking into account factors including Nexdoor's multiples, market movements and time creep, the analyst raises the price target to $14.75 from $12.50.

The Buy rating is unchanged.

This report was published on November 16, 2021.

Target price is $14.75 Current Price is $13.60 Difference: $1.15
If 360 meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 20.39 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 66.69.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.76 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 86.31.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ABY    ADORE BEAUTY GROUP LIMITED

Household & Personal Products – Overnight Price: $4.65

Shaw and Partners rates ((ABY)) as Buy (1) –

Sustaining momentum, Adore Beauty Group has reaffirmed a strong outlook for FY22 and previous guidance. Shaw and Partners highlighted first quarter revenue growth was up 25% on the previous corresponding period, and active customer growth up 25%. 

The broker also noted revenue upgrades for the year were likely depending on performance following Christmas in the third and fourth quarters. Despite being the category leader, Shaw and Partners expects continued market share gains and long-term growth. 

The Buy rating and target price of $6.00 are retained.

This report was published on November 15, 2021.

Target price is $6.00 Current Price is $4.65 Difference: $1.35
If ABY meets the Shaw and Partners target it will return approximately 29% (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 3.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 132.86.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 87.74.

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

ACL    AUSTRALIAN CLINICAL LABS LIMITED

Healthcare services – Overnight Price: $4.28

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

Australian Clinical Labs will acquire Medlab Pathology for $70m, with Goldman Sachs noting $60m will be paid upfront while an additional $5m will be paid on completion of 2022 and the remaining $5 will be subject to revenue retention targets. 

Australian Clinical Labs expects synergies of at least $10m over 18-24 months. Given Medlab Pathology's NSW and Queensland market share, where the company is relatively underweight, the broker notes the strategic transaction should drive growth in focus regions. 

The Buy rating and target price of $5.90 are retained. 

This report was published on November 15, 2021. 

Target price is $5.90 Current Price is $4.28 Difference: $1.62
If ACL meets the Goldman Sachs target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 65.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.58.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 29.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.76.

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

CXO    CORE LITHIUM LIMITED

New Battery Elements – Overnight Price: $0.56

Canaccord Genuity rates ((CXO)) as Initiation of coverage with Buy (1) –

Canaccord Genuity initiates on Core Lithium, a company focused on development of the Finniss Lithium project, an expected 174,000 tonne per annum spodumene concentrate operation with an eight-year mine life and all-in sustaining cost per tonne of US$441. 

The broker notes plans to commission the project in the second half of FY22 would make Core Lithium one of a few new spodumene concentrate sources globally, allowing the company to capitalise on high pricing given market tightness. 

Further, the project is well-located for transportation access, construction and easier processing, and there is upside exploration risk. 

The broker initiates with a Speculative Buy rating and a target price of $0.70. 

This report was published on November 14, 2021. 

Target price is $0.70 Current Price is $0.56 Difference: $0.14
If CXO meets the Canaccord Genuity target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.00.

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

DGL    DGL GROUP LIMITED

Commercial Services & Supplies – Overnight Price: $2.70

Bell Potter rates ((DGL)) as Upgrade to Buy from Hold (1) –

Following a weak recent share price and upgrades to earnings estimates, Bell Potter raises its rating for DGL Group to Buy from Hold. The broker also takes into account the recent acquisition of the Queensland-based automotive consumables formulator Austech for -$26m.

When combining this acquisition with that of Ausblue (made last month), the analyst foresees a differentiated play on Australia’s transition to net zero. Despite upgrades to EPS estimates, the price target of $3.05 remains unchanged.

This report was published on November 16, 2021.

Target price is $3.05 Current Price is $2.70 Difference: $0.35
If DGL meets the Bell Potter target it will return approximately 13% (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 7.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.49.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.00.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $11.77

Bell Potter rates ((ELD)) as Hold (3) –

Elder's FY21 underlying profit revealed a slight beat on versus Bell Potter's estimate. The broker retains its Hold rating. The outlook for acquisitions and integrating past ones is thought to be incorporated into consensus estimates.

The analyst points out the FY21 result was primarily driven by the retail and wholesale results, with agency modestly behind expectations. No formal guidance was provided by management though livestock prices are expected to remain elevated in the medium term.

The target falls to $12.90 from $13.45 to allow for higher net debt levels and deferred acquisition costs.

This report was published on November 16, 2021.

Target price is $12.90 Current Price is $11.77 Difference: $1.13
If ELD meets the Bell Potter target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $13.60, suggesting upside of 16.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 42.00 cents and EPS of 74.80 cents.
At the last closing share price the estimated dividend yield is 3.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.9, implying annual growth of N/A.
Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 43.00 cents and EPS of 74.00 cents.
At the last closing share price the estimated dividend yield is 3.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.4, implying annual growth of 0.7%.
Current consensus DPS estimate is 39.9, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.5.

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


Goldman Sachs rates ((ELD)) as Buy (1) –

Goldman Sachs has described Elders' FY21 result as very strong, noting organic growth, acquisitional activity and beneficial market condition drove performance. 

The broker expects the company to maintain momentum into FY22 having already secured a pipeline of 27 additional bolt-on acquisitions and further upside expected from the completion of the backward integration program in animal health and crop protection. 

Additionally, market conditions are expected to remain beneficial but Goldman Sachs finds the company well-positioned to deliver another strong year without factoring in external conditions. 

The Buy rating and target price of $15.65 are retained.

This report was published on November 15, 2021.

Target price is $15.65 Current Price is $11.77 Difference: $3.88
If ELD meets the Goldman Sachs target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $13.60, suggesting upside of 16.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 40.00 cents and EPS of 82.00 cents.
At the last closing share price the estimated dividend yield is 3.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.9, implying annual growth of N/A.
Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 42.00 cents and EPS of 86.00 cents.
At the last closing share price the estimated dividend yield is 3.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.4, implying annual growth of 0.7%.
Current consensus DPS estimate is 39.9, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.5.

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


Wilsons rates ((ELD)) as Underweight (5) –

Elders confirmed a strong FY21 result, with profit growth of 41% driven by a mix of organic improvement, favourable seasonal conditions and acquisitions, Wilsons notes. Structural growth drivers continue to deliver incremental earnings upside.

But the broker continues to assume currently elevated cyclical factors present a headwind to earnings growth towards the end of FY22 and into FY23.

Target falls to $10.03 from $10.20, Underweight retained.

This report was published on October 15, 2021.

Target price is $10.03 Current Price is $11.77 Difference: minus $1.74 (current price is over target).
If ELD meets the Wilsons target it will return approximately minus 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $13.60, suggesting upside of 16.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 44.00 cents and EPS of 66.90 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.9, implying annual growth of N/A.
Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 45.00 cents and EPS of 62.40 cents.
At the last closing share price the estimated dividend yield is 3.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.4, implying annual growth of 0.7%.
Current consensus DPS estimate is 39.9, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.5.

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

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $1.38

Wilsons rates ((JAN)) as Initiation of coverage with Overweight (1) –

Janison Education ((JAN)) is an education technology platform and assessment product provider servicing the K-12 (schools), higher education, and enterprise markets in A&NZ and abroad. Over the next few-years, Janison expects to nearly triple revenue through growth.

Wilsons initiates coverage of the stock with an Overweight rating and $1.38 target, estimating a total shareholder return of 18% over 12 months.

Wilsons sees assessment platform and product growth as transformational given an increased exposure to higher quality recurring revenues, margin expansion, and a growing geographic footprint, supported by post-covid back-to-school.

This report was published on November 15, 2021.

Target price is $1.38 Current Price is $1.38 Difference: $0
If JAN meets the Wilsons target it will return approximately 0% (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 1.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 98.57.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1380.00.

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

NTO    NITRO SOFTWARE LIMITED

IT & Support – Overnight Price: $3.81

Evans and Partners rates ((NTO)) as Positive (1) –

According to Evans and Partners the acquisition of e-sign company Connective has cemented Nitro Software's position as the third largest digital documentation and signing provider globally. 

Given Connective's volume-linked revenue model, as compared to Nitro Software's subscription-based one, the broker expects revenue growth to benefit both from new customer signings and increased market penetration. 

Revenue forecasts increase 18% and 15% for FY22 and FY23, with underlying losses also up given integration costs. 

The Positive rating is retained and the valuation decreases to $6.06 from $6.40. 

This report was published on November 10, 2021.

Current Price is $3.81. Target price not assessed.
The company's fiscal year ends in December.

Forecast for FY21:

Evans and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 13.24 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 28.77.

Forecast for FY22:

Evans and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 16.68 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.84.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OPY    OPENPAY GROUP LIMITED

Business & Consumer Credit – Overnight Price: $1.19

Shaw and Partners rates ((OPY)) as Buy (1) –

Following a September quarter trading update at Openpay Group's AGM, Shaw and Partners assesses all key operating metrics are displaying robust growth. Portfolio management and pricing initiatives have boosted revenue margins, explains the broker. 

The analyst highlights that new BNPL repayment plans from repeat customers were at a record 85% versus 78% in previous corresponding period and over 87% of plans are over three months in tenure.

Shaw and Partners makes no changes to forecasts and its Buy rating and target price of $3.50 are retained. 

This report was published on November 16, 2021.

Target price is $3.50 Current Price is $1.19 Difference: $2.31
If OPY meets the Shaw and Partners target it will return approximately 194% (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 34.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.41.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 16.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.21.

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

RHC    RAMSAY HEALTH CARE LIMITED

Healthcare services – Overnight Price: $68.17

Evans and Partners rates ((RHC)) as Downgrade to Neutral from Positive (3) –

Ramsey Health Care saw revenue recovery in Australia Pacfic, the UK and the Nordics in the first quarter, with Evans and Partners noting 20.6% year-on-year growth from the UK was the strongest rebound, but revenue in France continues to be impacted by nursing shortages. 

The broker highlights significant pressure for the company given reported profit after tax margins of 1.8%, compared to 3.0% in the same quarter last year, as nursing shortages continue. 

The rating is downgraded to Neutral from Positive and the valuation decreases to $65.00 from $75.00.

This report was published on November 12, 2021. 

Current Price is $68.17. Target price not assessed.
Current consensus price target is $68.88, suggesting upside of 2.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Evans and Partners forecasts a full year FY22 dividend of 120.49 cents and EPS of 168.64 cents.
At the last closing share price the estimated dividend yield is 1.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 187.3, implying annual growth of -3.0%.
Current consensus DPS estimate is 121.4, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 35.9.

Forecast for FY23:

Evans and Partners forecasts a full year FY23 dividend of 160.95 cents and EPS of 247.56 cents.
At the last closing share price the estimated dividend yield is 2.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 267.7, implying annual growth of 42.9%.
Current consensus DPS estimate is 161.8, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 25.1.

Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SLC    SUPERLOOP LIMITED

Telecommunication – Overnight Price: $1.21

Canaccord Genuity rates ((SLC)) as Buy (1) –

Having outlined its corporate strategy intended to generate growth, increase return on capital and further monetise its underutilised infrastructure, Superloop announced medium-term revenue and gross profit targets far exceeding Canaccord Genuity's expectations. 

The broker noted Superloop is gaining market share, with its share of new NBN connections increasing to 2.2% in the first quarter of FY22 from 0.7% in the same period in FY21, and is targeting 4-5% medium-term market share, implying a $460-575m revenue target. 

The Buy rating and target price of $1.42 are retained.

This report was published on November 12, 2021.

Target price is $1.42 Current Price is $1.21 Difference: $0.21
If SLC meets the Canaccord Genuity target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $1.29, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 6.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 18.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.2, 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:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 100.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.4, 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.

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

SLH    SILK LOGISTICS HOLDINGS LIMITED

Transportation & Logistics – Overnight Price: $2.36

Shaw and Partners rates ((SLH)) as Buy (1) –

At the Silk Logistics' AGM, management was confident of meeting or exceeding forecasts for FY22. At the end of October, FY22 revenue and earnings (EBIT) (pre-AASB16) were tracking 6% and 8% ahead of prospectus estimates.

The company also referred to negotiations for an acquisition in the E-commerce sector, which should be completed by 2022. According to Shaw and Partners, the shares remain cheap both on valuation multiples and by way of a significant discount to listed peers.

Buy rating and $3.15 target maintained.

This report was published on November 16, 2021.

Target price is $3.15 Current Price is $2.36 Difference: $0.79
If SLH meets the Shaw and Partners target it will return approximately 33% (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 9.00 cents and EPS of 18.20 cents.
At the last closing share price the estimated dividend yield is 3.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.97.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 10.00 cents and EPS of 20.70 cents.
At the last closing share price the estimated dividend yield is 4.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.40.

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

XRO    XERO LIMITED

Accountancy – Overnight Price: $145.60

Evans and Partners rates ((XRO)) as Positive (1) –

Xero's first half revenue of $505.7m was up 23% year-on-year, but a miss on Evans and Partners' forecast, but the broker expects price rises in Australia and New Zealand and the UK will benefit second half revenue. 

While subscriber growth was softer than expected, the broker notes Xero did notably outperform peers. Revenue forecasts are downgraded -2.5%, -6.3% and -7.6% through to FY24, driven by the third stage of the Making Tax Digital project being pushed back a year. 

The Positive rating is retained and the valuation increases to $197.00.

This report was published on November 12, 2021.

Current Price is $145.60. Target price not assessed.
Current consensus price target is $134.17, suggesting downside of -9.2%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY22:

Evans and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 8.65 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1682.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.1, 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 2082.1.

Forecast for FY23:

Evans and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 25.02 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 582.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.5, implying annual growth of 498.6%.
Current consensus DPS estimate is 2.4, implying a prospective dividend yield of 0.0%.
Current consensus EPS estimate suggests the PER is 347.8.

This company reports in NZD. 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


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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CHARTS

360 ABY ACL CXO DGL ELD JAN NTO OPY RHC SLC SLH XRO

For more info SHARE ANALYSIS: 360 - LIFE360, INC

For more info SHARE ANALYSIS: ABY - ADORE BEAUTY GROUP LIMITED

For more info SHARE ANALYSIS: ACL - AUSTRALIAN CLINICAL LABS LIMITED

For more info SHARE ANALYSIS: CXO - CORE LITHIUM LIMITED

For more info SHARE ANALYSIS: DGL - DGL GROUP LIMITED

For more info SHARE ANALYSIS: ELD - ELDERS LIMITED

For more info SHARE ANALYSIS: JAN - JANISON EDUCATION GROUP LIMITED

For more info SHARE ANALYSIS: NTO - NITRO SOFTWARE LIMITED

For more info SHARE ANALYSIS: OPY - OPENPAY GROUP LIMITED

For more info SHARE ANALYSIS: RHC - RAMSAY HEALTH CARE LIMITED

For more info SHARE ANALYSIS: SLC - SUPERLOOP LIMITED

For more info SHARE ANALYSIS: SLH - SILK LOGISTICS HOLDINGS LIMITED

For more info SHARE ANALYSIS: XRO - XERO LIMITED