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Australian Broker Call *Extra* Edition – Jan 17, 2022

Daily Market Reports | Jan 17 2022

This story features AUSSIE BROADBAND LIMITED, and other companies. For more info SHARE ANALYSIS: ABB

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   ASB   BCI   CWN   FFX   LTR   MGV   MXC   RDY 

ABB    AUSSIE BROADBAND LIMITED

Telecommunication – Overnight Price: $4.55

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

Shaw and Partners is positive on Aussie Broadband's acquisition of Over The Wire ((OTW)) given the combination offers a business with a full offering of products and intellectual property in business and retail. 

The broker is forecasting earnings per share accretion of 49%, 36% and 27% through to FY24, not including likely revenue synergies, while Aussie Broadband's free cash flow is predicted to improve 98% to more than $75m in FY23.

The Buy rating is retained and the target price increases to $6.15 from $5.52.

This report was published on January 13, 2022.

Target price is $6.15 Current Price is $4.55 Difference: $1.6
If ABB meets the Shaw and Partners target it will return approximately 35% (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 8.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.70.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 3.10 cents and EPS of 15.50 cents.
At the last closing share price the estimated dividend yield is 0.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.35.

Market Sentiment: 0.5
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: $2.01

Petra Capital rates ((ASB)) as Buy (1) –

Petra Capital has highlighted the significant upside to Austal's share price given the Philippines government is looking to finalise an agreement with the company for six offshore patrol vessels by May 2022. 

The Philippines offshore patrol vessel program has been granted $800m in government funding, and the broker expects the contract to contribute to company revenue between FY23 and FY28. Further, it anticipates a prospective order book of around $7bn to FY33. 

The Buy rating is retained and the target price decreases to $2.80 from $2.90.

This report was published on January 13, 2022.

Target price is $2.80 Current Price is $2.01 Difference: $0.79
If ASB meets the Petra Capital target it will return approximately 39% (excluding dividends, fees and charges).
Current consensus price target is $2.62, suggesting upside of 30.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Petra Capital forecasts a full year FY22 dividend of 10.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 4.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.2, implying annual growth of -14.9%.
Current consensus DPS estimate is 9.1, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 10.5.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 14.50 cents and EPS of 28.60 cents.
At the last closing share price the estimated dividend yield is 7.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.6, implying annual growth of -8.3%.
Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 11.4.

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

BCI    BCI MINERALS LIMITED

Iron Ore – Overnight Price: $0.43

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

The completion of a $360m capital raising should finalise the $1.2bn funding package needed to fully fund BCI Minerals' Mardie salt and potash project, according to Bell Potter, allowing development to commence following mining tenure and secondary approvals. 

On a three and half year development timeline, first salt sales from the project are expected in 2024, and first sulphate of potash sales in 2026. On dilution from the capital raise Bell Potter updates earnings per share forecasts -23% and -28% for FY22 and FY23.

The Buy rating is retained and the target price decreases to $0.66 from $0.71.

This report was published on January 11, 2022. 

Target price is $0.66 Current Price is $0.43 Difference: $0.23
If BCI meets the Bell Potter target it will return approximately 53% (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 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.93.

Forecast for FY23:

Bell Potter 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 22.63.

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

CWN    CROWN RESORTS LIMITED

Gaming – Overnight Price: $12.59

Goldman Sachs rates ((CWN)) as Neutral (3) –

Goldman Sachs revisits Crown Resorts after digesting a mid-December site tour.

The broker is a tad more positive on the stock, and points to Crown's priority and focus on culture and remediation, optimism towards an early new year opening of the Sydney gaming floor, appetite to divest non-core assets, and options to add more gaming floor space in Sydney.   

The broker tinkers with earnings forecasts and lifts the target price to $11.03 from $10.29 to reflect the generally positive Victorian Royal Commission and the potential expansion of gaming floor space in 2022.

Neutral rating retained given the share price is higher than the target price, and the broker considers Star Entertainment ((SGR)) its top sector pick.

This report was published on January 12, 2021.

Target price is $11.03 Current Price is $12.59 Difference: minus $1.56 (current price is over target).
If CWN meets the Goldman Sachs target it will return approximately minus 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $13.48, suggesting upside of 7.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 9.00 cents and EPS of minus 21.00 cents.
At the last closing share price the estimated dividend yield is 0.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 59.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -10.5, implying annual growth of N/A.
Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 47.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 3.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.0, implying annual growth of N/A.
Current consensus DPS estimate is 46.5, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 30.7.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

FFX    FIREFINCH LIMITED

Gold & Silver – Overnight Price: $0.74

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

Mining has commenced at Firefinch's 80% owned Morila Super Pit, which hosts 76% of the total 2.43m ounce mine resource. Canaccord Genuity notes first ore is expected in the June quarter, with the Super Pit providing the bulk of ore from the second half. 

The broker expects production to increase to 110,000 ounces in 2022 as Super Pit operations continue, increasing to 170,000 ounces longer-term. The broker also notes a resource update has been flagged for this quarter. 

The Speculative Buy rating and target price of $1.50 are retained.

This report was published on January 6, 2022.

Target price is $1.50 Current Price is $0.74 Difference: $0.76
If FFX meets the Canaccord Genuity target it will return approximately 103% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 37.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.33.

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

LTR    LIONTOWN RESOURCES LIMITED

New Battery Elements – Overnight Price: $1.72

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

Liontown Resources has signed its first offtake agreement for production from its Kathleen Valley project. Bell Potter notes LG Energy Solution has agreed to a five-year contract at 150,000 tonnes per annum spodumene, commencing with first production in 2024.

According to the broker, LG Energy Solution's commitment to purchasing one third of initial production will allow Liontown Resources to diversify further offtake opportunities. The contract allows for a further, mutually agreed five year extension option. 

The Speculative Buy rating and target price of $2.15 are retained.

This report was published on January 12, 2022.

Target price is $2.15 Current Price is $1.72 Difference: $0.43
If LTR meets the Bell Potter target it will return approximately 25% (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 minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 430.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 430.00.

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

MGV    MUSGRAVE MINERALS LIMITED

Gold & Silver – Overnight Price: $0.33

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

Canccord Genuity has described results out of Musgrave Minerals' Waratah project as encouraging, as exploration of previously untested or poorly tested areas at the site continue to identify strong gold mineralisation. 

While it may be too early for Waratah prospects to be included in the June quarter resource update, it could underpin resource growth later in the year. With growth in other resources, the broker expects the resource update could deliver approximately 800,000 ounces. 

The Speculative Buy rating and target price of $0.65 are retained.

This report was published on January 6, 2022.

Target price is $0.65 Current Price is $0.33 Difference: $0.32
If MGV meets the Canaccord Genuity target it will return approximately 97% (excluding dividends, fees and charges).

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

MXC    MGC PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.04

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

Canaccord Genuity estimates MGC Pharmaceuticals could generate $20m in revenue in FY22, largely driven by interest in symptomatic covid treatment CimetrA. The broker notes considerable upside risk to estimates in the case of further sales. 

MGC Pharmaceuticals plans to seek approval for FDA Emergency Use designation for the treatment. A Phase 3 study on the CimetrA treatment should provide detail on clinical efficacy in the first half of 2022.

The Speculative Buy rating is retained and the target price decreases to $0.14.

This report was published on January 5, 2021.

Target price is $0.14 Current Price is $0.04 Difference: $0.1
If MXC meets the Canaccord Genuity target it will return approximately 250% (excluding dividends, fees and charges).

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: $3.20

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

While Readytech Holdings lost out on a government licensing project, Shaw and Partners notes given the tender was awarded to a custom build solution, compared to Readytech Holdings' out-of-box offering, the opportunity appears different to originally pictured.

Further, the broker notes this does not suggest Readytech Holdings' product is not competitive against other out-of-box products, and highlights no impact on the company's gross pipeline, FY22 guidance and FY26 targets given project revenue was never forecast.

The Buy rating is retained and the target price increases to $4.05 from $4.00.

This report was published on January 14, 2022.

Target price is $4.05 Current Price is $3.20 Difference: $0.85
If RDY meets the Shaw and Partners target it will return approximately 27% (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 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.67.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 14.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.62.

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.

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CHARTS

ABB ASB BCI CWN FFX LTR MGV MXC OTW RDY SGR

For more info SHARE ANALYSIS: ABB - AUSSIE BROADBAND LIMITED

For more info SHARE ANALYSIS: ASB - AUSTAL LIMITED

For more info SHARE ANALYSIS: BCI - BCI MINERALS LIMITED

For more info SHARE ANALYSIS: CWN - CROWN RESORTS LIMITED

For more info SHARE ANALYSIS: FFX - FIREFINCH LIMITED

For more info SHARE ANALYSIS: LTR - LIONTOWN RESOURCES LIMITED

For more info SHARE ANALYSIS: MGV - MUSGRAVE MINERALS LIMITED

For more info SHARE ANALYSIS: MXC - MGC PHARMACEUTICALS LIMITED

For more info SHARE ANALYSIS: OTW - OVER THE WIRE HOLDINGS LIMITED

For more info SHARE ANALYSIS: RDY - READYTECH HOLDINGS LIMITED

For more info SHARE ANALYSIS: SGR - STAR ENTERTAINMENT GROUP LIMITED