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Australian Broker Call *Extra* Edition – Jan 25, 2022

Daily Market Reports | Jan 25 2022

This story features ARISTOCRAT LEISURE LIMITED, and other companies. For more info SHARE ANALYSIS: ALL

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)

ALL   BRB   DCG   DSE   FZO   GQG   GTN   LYC   SOV   TUL   UNI   WSP  

ALL    ARISTOCRAT LEISURE LIMITED

Gaming – Overnight Price: $41.05

Jarden rates ((ALL)) as Initiation of coverage with Overweight (2) –

Jarden initiates coverage on Aristocrat Leisure with an Overweight rating and $46.85 target price. There's considered to be upcoming positive catalysts for the mobile games publisher and global gaming content and technology company.

These catalysts include a post-covid rebound in the land-based gaming market and potential market share gains for the North American operations.

Risks may emanate from integration of the Playtech acquisition and ESG considerations, cautions the analyst.

This report was published on January 19, 2022.

Target price is $46.85 Current Price is $41.05 Difference: $5.8
If ALL meets the Jarden target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $49.73, suggesting upside of 22.5%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 58.00 cents and EPS of 145.20 cents.
At the last closing share price the estimated dividend yield is 1.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 153.5, implying annual growth of 19.8%.
Current consensus DPS estimate is 61.6, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 26.4.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 74.00 cents and EPS of 185.80 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 187.4, implying annual growth of 22.1%.
Current consensus DPS estimate is 76.2, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 21.7.

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

BRB    BREAKER RESOURCES NL

Mining – Overnight Price: $0.25

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

Breaker Resources will divest up to an 80% interest in the Manna Lithium discovery lithium rights to Global Lithium Resources ((GL1)) for up to $33m, deferring requirement for near-term equity raising as noted by Bell Potter. 

Global Lithium Resources can earn up to 80% of the lithium rights through funding of exploration and technical studies and delivery of a feasibility study within five years. Failure to meet conditions will see Global Lithium Resources' equity reduce to a 50% joint venture.

Bell Potter notes while the deal is in-line with its current valuation this was heavily risk adjusted given pre-resource status, and Breaker Resources may have missed an opportunity given a maiden resource announcement could have derisked the project.

The Buy rating and target price of $0.56 are retained.

This report was published on January 18, 2022.

Target price is $0.56 Current Price is $0.25 Difference: $0.31
If BRB meets the Bell Potter target it will return approximately 124% (excluding dividends, fees and charges).

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

DCG    DECMIL GROUP LIMITED

Mining Sector Contracting – Overnight Price: $0.28

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

Recent operational updates by Decimil Group suggest to Petra Capital the potential for a material increase in earnings over the next two to three years.

However, near-term funding constraints and project delays lead the broker to lower its target price to $0.55 from $0.64. Nonetheless, it's thought the latest capital raise should lead to the above-mentioned earnings growth and cash generation. 

The Buy rating is maintained.

This report was published on January 19, 2022.

Target price is $0.55 Current Price is $0.28 Difference: $0.27
If DCG meets the Petra Capital target it will return approximately 96% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Petra Capital forecasts a full year FY22 dividend of 0.00 cents and EPS of 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.33.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of 8.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.22.

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

DSE    DROPSUITE LIMITED

Cloud services – Overnight Price: $0.21

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

Dropsuite's 4Q result revealed a 4% beat for annual recurring revenue (ARR) over Canaccord Genuity's estimate. As a result, the broker raises its ARR forecasts for FY21-23 by around 4%.

The analyst predicts a breakout year for the stock and suggests (during the current risk-off technology market sentiment) investors will return to such high-growth businesses.

The Buy rating and a target price of $0.30 are unchanged.

This report was published on January 19, 2022.

Target price is $0.30 Current Price is $0.21 Difference: $0.09
If DSE meets the Canaccord Genuity target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 105.00.

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

FZO    FAMILY ZONE CYBER SAFETY LIMITED

Software & Services – Overnight Price: $0.51

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

Family Zone's 2Q annual recurring revenue (ARR) and a host of other metrics including margins, were a material beat over Shaw and Partners' estimates. It's thought the company deserves a rerate after the significant acceleration (and projected growth) in ARR.

The analyst highlights the ARR from the core B2B business is exceeding expectations due to outperformance from the UK-based Smoothwall, as well an uplift from a broader cross-sell and up-sell opportunities.

The target price rises to $1.04 from $1.02 and the Buy rating is maintained.

This report was published on January 20, 2022.

Target price is $1.04 Current Price is $0.51 Difference: $0.53
If FZO meets the Shaw and Partners target it will return approximately 104% (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 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 39.23.

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

GQG    GQG PARTNERS INC

Wealth Management & Investments – Overnight Price: $1.71

Goldman Sachs rates ((GQG)) as Initiation of coverage with Buy (1) –

Goldman Sachs initiates coverage on GQG Partners Inc with a Buy rating and $2.45 target price. The past investment performance, low fees and strong distribution of the active asset manager are considered part of the investment thesis.

The broker outlines several risks including a relatively concentrated product/style suite and key personnel risk. On the flipside, the co-founders have the majority of their net wealth invested in the company's investment strategies.

This report was published on January 20, 2022.

Target price is $2.45 Current Price is $1.71 Difference: $0.74
If GQG meets the Goldman Sachs target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

Forecast for FY23:

Goldman Sachs 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 17.10.

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

GTN    GTN LIMITED

Print, Radio & TV – Overnight Price: $0.58

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

Canaccord Genuity maintains its Buy rating for GTN Ltd and raises its target price to $0.70 from $0.60 after management guided to $81m of 1H revenue. This continues a trend of positive revenue growth which started in the 3Q of FY21, points out the analyst.

The broker feels revenue represents a more important determinant of the company's valuation and, as a result, is unconcerned about increases to forecast costs.

This report was published on January 19, 2022.

Target price is $0.70 Current Price is $0.58 Difference: $0.12
If GTN meets the Canaccord Genuity target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.17.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 2.10 cents and EPS of 6.50 cents.
At the last closing share price the estimated dividend yield is 3.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.92.

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

LYC    LYNAS RARE EARTHS LIMITED

Rare Earth Minerals – Overnight Price: $9.84

Canaccord Genuity rates ((LYC)) as Downgrade to Hold from Buy (3) –

December quarter production for Lynas Rare Earth was broadly in-line with Canaccord Genuity's forecast and the consensus estimate.

The broker sees little valuation upside from its current price forecasts, and refers to the potential for a timeline slippage at Kalgoorlie. Thus, the rating is reduced to Hold from Buy (after a recent share price rally) and the target price remains at $10.90.

Management expects global logistics issues to persist over the foreseeable future and has taken steps to remedy the issue to maintain utilisation rates at around 75%.

This report was published on January 19, 2022.

Target price is $10.90 Current Price is $9.84 Difference: $1.06
If LYC meets the Canaccord Genuity target it will return approximately 11% (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 17.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 57.88.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 51.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.29.

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

SOV    SOVEREIGN CLOUD HOLDINGS LIMITED

Cloud services – Overnight Price: $0.62

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

Sovereign Cloud Holdings secured $2.5m of new contract value in the 2Q. The company has over $40m of cash in the bank after a $35m equity raise in the prior quarter, which is expected to be to deployed towards sales to state governments and Critical National Industries.

In doing so, the company will utilise the skills of NextDC ((NXT)), which took a 20% position on the company register during the quarter.

As a result of the new equity funding, the target price slips to $0.90 from $1.05, while the Buy rating remains.

This report was published on January 20, 2022.

Target price is $0.90 Current Price is $0.62 Difference: $0.28
If SOV meets the Canaccord Genuity target it will return approximately 45% (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 minus 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.33.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 4.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.65.

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

TUL    TULLA RESOURCES PLC

Gold & Silver – Overnight Price: $0.60

Canaccord Genuity rates ((TUL)) as Speculative Buy (1) –

Canaccord Genuity maintains its Speculative Buy rating and increases its target price to $1.10 from $1.05 as first production approaches (September quarter estimate) at the 50%-owned Norseman Gold Project.

The analyst highlights a modest pre-production capital requirement for the 1Mtpa plant and associated infrastructure. This is because a significant amount of infrastructure is already in place, as the Norseman asset has a long history of gold production.

This report was published on January 20, 2022.

Target price is $1.10 Current Price is $0.60 Difference: $0.5
If TUL meets the Canaccord Genuity target it will return approximately 83% (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 minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 60.00.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 60.00.

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

UNI    UNIVERSAL STORE HOLDINGS LIMITED

Apparel & Footwear – Overnight Price: $6.12

Jarden rates ((UNI)) as Neutral (3) –

Despite Universal Store Holdings producing a 'good' pre-released 1H result, Jarden keeps a Neutral rating in the absence of a trading update, and a small risk that the consensus 2H forecast will go unmet.

The broker was pleased by a fall of just -40bps for the gross margin and upgrades FY23–FY24  forecasts marginally, resulting in a target price of $8.20, up from $8.

The analyst likes the estimated 28% compound annual growth rate (CAGR) story from FY22 to FY25.

This report was published on January 19, 2022.

Target price is $8.20 Current Price is $6.12 Difference: $2.08
If UNI meets the Jarden target it will return approximately 34% (excluding dividends, fees and charges).
Current consensus price target is $8.77, suggesting upside of 42.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 17.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 2.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.4, implying annual growth of -14.7%.
Current consensus DPS estimate is 10.0, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 21.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 27.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.5, implying annual growth of 56.7%.
Current consensus DPS estimate is 16.5, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 13.8.

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

WSP    WHISPIR LIMITED

Cloud services – Overnight Price: $2.33

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

Canaccord Genuity considers Whispir’s second quarter result was strong. Management reiterated FY22 guidance of $65-70m for annual recurring revenue and an earnings (EBITDA) loss of -$13.2m to -$11.2m.

In looking at the most significant potential near-term catalyst, the broker points to emerging signs of growth in North America, given the substantial market opportunity. The normalisation of free cashflow burn is considered another important catalyst.

The Buy rating and $3.50 target price are unchanged.

This report was published on January 20, 2022.

Target price is $3.50 Current Price is $2.33 Difference: $1.17
If WSP meets the Canaccord Genuity target it will return approximately 50% (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 minus 15.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.53.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 12.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.26.

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

ALL BRB DCG DSE FZO GL1 GQG GTN LYC NXT SOV TUL UNI WSP

For more info SHARE ANALYSIS: ALL - ARISTOCRAT LEISURE LIMITED

For more info SHARE ANALYSIS: BRB - BREAKER RESOURCES NL

For more info SHARE ANALYSIS: DCG - DECMIL GROUP LIMITED

For more info SHARE ANALYSIS: DSE - DROPSUITE LIMITED

For more info SHARE ANALYSIS: FZO - FAMILY ZONE CYBER SAFETY LIMITED

For more info SHARE ANALYSIS: GL1 - GLOBAL LITHIUM RESOURCES LIMITED

For more info SHARE ANALYSIS: GQG - GQG PARTNERS INC

For more info SHARE ANALYSIS: GTN - GTN LIMITED

For more info SHARE ANALYSIS: LYC - LYNAS RARE EARTHS LIMITED

For more info SHARE ANALYSIS: NXT - NEXTDC LIMITED

For more info SHARE ANALYSIS: SOV - SOVEREIGN CLOUD HOLDINGS LIMITED

For more info SHARE ANALYSIS: TUL - TULLA RESOURCES PLC

For more info SHARE ANALYSIS: UNI - UNIVERSAL STORE HOLDINGS LIMITED

For more info SHARE ANALYSIS: WSP - WHISPIR LIMITED