Australian Broker Call *Extra* Edition – Nov 25, 2021

Daily Market Reports | Nov 25 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)

AAC   AFP   AMN   ARX   AX1 (2)   BSX   CAT (2)   COF   CTT   CWN   DDH   EHL (2)   ELO   EVN   FBU   JDO   JLG   LGL   MVF   NAN   NWC   RDY   SDV   TWE   WTC  

RDY    READYTECH HOLDINGS LIMITED

Software & Services - Overnight Price: $3.63

Jarden rates ((RDY)) as Initiation of coverage with Overweight (2) -

Jarden initiates coverage on ReadyTech Holdings with an Overweight rating and $4.63 target price. The leading provider of education, employment, as well as government and justice software in Australia is considered to have solid long-term growth characteristics.

Effectively, the company is a people management software company. The analyst estimates a five year compound annual growth rate (CAGR) for revenue and EPS of 19% and 17%. It's thought growth should be mostly organic, coupled with M&A in key verticals.

Among risks, Jarden includes adverse regulation that could impact client IT budgets and increased competition from larger scale operators.

This report was published on November 22, 2021.

Target price is $4.63 Current Price is $3.63 Difference: $1
If RDY meets the Jarden target it will return approximately 28% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 13.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.29.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 15.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.42.

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

SDV    SCIDEV LIMITED

Industrial Sector Contractors & Engineers - Overnight Price: $0.59

Canaccord Genuity rates ((SDV)) as Buy (1) -

Cannacord expects SciDev will end 2021 with renewed growth, despite a covid hit to the September quarter, and says the company is well positioned to pursue its strong pipeline of opportunities after its recent capital raising.

The company is an ESG water play, focusing on solutions to improve water sustainability for heavy industry with a largely recurring revenue base.

The broker notes the company is already profitable and growing exceptionally fast, and is building out its supply chain which should boost margins.

But the covid hit was more severe than the broker expected, and combined with the placement dilution, triggers a cut in the target price to $1.01 from $1.36. 

Buy rating retained in a nod to the huge environmental tailwinds in the industry.

This report was published on November 22, 2021.

Target price is $1.36 Current Price is $0.59 Difference: $0.77
If SDV meets the Canaccord Genuity target it will return approximately 131% (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 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 147.50.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.05.

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

TWE    TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco - Overnight Price: $11.94

Jarden rates ((TWE)) as Neutral (3) -

Jarden lifts FY23 EPS estimates by 5% for Treasury Wine Estates and feels two announcements point to a stronger position in the Americas. They were the acquisition of Franks Family Vineyard for -$432m, and the raising of $300m from commercial divestments.

For a number of reasons, including low expectations, the broker is becoming more positive on the company's outlook. The company is also considered set to benefit from the global reopening and a return of higher margin channels. 

The Neutral rating is unchanged and the target price rises to $11.60 from $10.80.

This report was published on November 18, 2021.

Target price is $11.60 Current Price is $11.94 Difference: minus $0.34 (current price is over target).
If TWE meets the Jarden target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $12.57, suggesting upside of 5.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 30.00 cents and EPS of 45.80 cents.
At the last closing share price the estimated dividend yield is 2.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.9, implying annual growth of 26.7%.
Current consensus DPS estimate is 28.4, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 27.2.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 34.00 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 2.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.6, implying annual growth of 22.1%.
Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 22.3.

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

WTC    WISETECH GLOBAL LIMITED

Cloud services - Overnight Price: $51.71

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

WiseTech Global reiterated guidance at its AGM. Bell Potter highlights commentary around the digital transformation, which has required logistics providers to fast-track integrated software such as CargoWise.

Management expects supply chain disruption, capacity constraints and new covid-19 strains in key markets will continue to impact. The broker is already at the upper-end of the FY22 revenue guidance range and makes no changes to forecasts.

However, Bell Potter's target price rises to $56.25 from $47.50 after adjusting for market movements and time creep. Moreover, the relative valuation has now attracted a greater premium, and the weighted average cost of capital (WACC) applied has decreased.

This report was published on November 22, 2021.

Target price is $56.25 Current Price is $51.71 Difference: $4.54
If WTC meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $39.13, suggesting downside of -24.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 9.10 cents and EPS of 49.00 cents.
At the last closing share price the estimated dividend yield is 0.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 105.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.9, implying annual growth of 41.0%.
Current consensus DPS estimate is 7.3, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 110.3.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 11.60 cents and EPS of 61.30 cents.
At the last closing share price the estimated dividend yield is 0.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 84.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.4, implying annual growth of 41.6%.
Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 77.9.

Market Sentiment: 0.3
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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