Australian Broker Call *Extra* Edition – Feb 28, 2022

This story features ADBRI LIMITED, and other companies. For more info SHARE ANALYSIS: ABC

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)

ABC   BVS   BWX   BXB   EBR   FLT   MPL   PPG   QUB   REG  

ABC    ADBRI LIMITED

Building Products & Services – Overnight Price: $3.24

Jarden rates ((ABC)) as Upgrade to Overweight from Neutral (2) –

First half results for Adbri were better than the market expected, according to Jarden, and management were upbeat, particularly on the pricing outlook for cement. The broker lifts its FY22/23 EPS estimates by 41.6% and 34.0% and raises its target to $3.55 from $3. 

The rating is also upgraded to Overweight from Neutral, with the analyst expecting strong growth to continue in FY22 due to residential construction activity and infrastructure tenders.

The broker estimates the earnings (EBITDA) margin can improve to 21.3% in FY22 versus 17.3% in FY21, as a result of product price increases, strong volumes and cost efficiencies.

This report was published on February 28, 2022.

Target price is $3.55 Current Price is $3.24 Difference: $0.31
If ABC meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $3.56, suggesting upside of 8.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 18.50 cents and EPS of 26.50 cents.
At the last closing share price the estimated dividend yield is 5.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.8, implying annual growth of 16.3%.
Current consensus DPS estimate is 11.5, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 15.8.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 17.90 cents and EPS of 25.60 cents.
At the last closing share price the estimated dividend yield is 5.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.6, implying annual growth of 3.8%.
Current consensus DPS estimate is 11.4, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 15.2.

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

BVS    BRAVURA SOLUTIONS LIMITED

Wealth Management & Investments – Overnight Price: $1.67

Goldman Sachs rates ((BVS)) as Downgrade to Neutral from Buy (3) –

Higher costs and pipeline delays have seen Bravura Solutions' updated full year profit guidance fall -19-32% below Goldman Sachs' forecast. Year-on-year revenue growth of more than 10% is still expected. 

Better than expected first half results, but the broker notes slow pipeline conversion has driven stock underperformance. Long-term contract terms also impact margins as labour costs rise. Earnings per share forecasts decrease -31%, -31% and -24% through to FY24. 

The rating is downgraded to Neutral from Buy and the target price decreases to $1.90 from $3.70. 

This report was published on February 26, 2022.

Target price is $1.90 Current Price is $1.67 Difference: $0.23
If BVS meets the Goldman Sachs target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 7.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 4.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.70.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 8.00 cents and EPS of 12.00 cents.
At the last closing share price the estimated dividend yield is 4.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.92.

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

BWX    BWX LIMITED

Household & Personal Products – Overnight Price: $2.48

Moelis rates ((BWX)) as Upgrade to Buy from Hold (1) –

Following 1H results for BWX, Moelis downgrades  FY22-24 EPS forecasts by around -30% to capture a slower offshore roll-out, while  higher assumed marketing costs mostly offset gross margin improvements from the new factory.

Despite lowered forecasts, the broker highlights a portfolio of high quality brands, in particular Sukin and Go-To, both of which have large potential in the US. The rating is upgraded to Buy from Hold and it's felt the company is also a potential takeover target.

While store closures and weaker foot traffic during covid lockdowns weighed, management retained guidance and noted sales momentum from the 2Q continues into the 3Q. Target moves to $4.16.

This report was published on February 28, 2022.

Target price is $4.16 Current Price is $2.48 Difference: $1.68
If BWX meets the Moelis target it will return approximately 68% (excluding dividends, fees and charges).
Current consensus price target is $5.40, suggesting upside of 121.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 2.60 cents and EPS of 10.40 cents.
At the last closing share price the estimated dividend yield is 1.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.3, implying annual growth of -22.1%.
Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 18.3.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 4.50 cents and EPS of 13.70 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.0, implying annual growth of 27.8%.
Current consensus DPS estimate is 5.5, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 14.4.

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

BXB    BRAMBLES LIMITED

Transportation & Logistics – Overnight Price: $9.81

Jarden rates ((BXB)) as Upgrade to Overweight from Neutral (2) –

While assessing 1H results for Brambles, Jarden concludes the share price fall is overdone, regardless of concerns about free cash generation. As a result, the rating is moved to Overweight from Neutral. The target falls to $11 from $11.14.

The analyst points out the result was around 5% ahead of the consensus forecast with the CHEP Americas division the standout. Rather than free cash flow, it's felt the market should focus upon the strong pricing environment in the US Pallets business.

Other alternative foci are the potential benefits from recovery of uncompensated losses and when capital intensity will likely reduce, advises the broker.

In short, Jarden sees the operating performance of Brambles improving, despite the significant cost inflation and supply chain disruption.

This report was published on February 28, 2022.

Target price is $11.00 Current Price is $9.81 Difference: $1.19
If BXB meets the Jarden target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $11.58, suggesting upside of 16.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 52.65 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.0, implying annual growth of N/A.
Current consensus DPS estimate is 32.8, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 17.4.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 53.99 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 61.3, implying annual growth of 7.5%.
Current consensus DPS estimate is 33.2, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 16.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

EBR    EBR SYSTEMS, INC

Medical Equipment & Devices – Overnight Price: $0.68

Wilsons rates ((EBR)) as Overweight (1) –

Wilson maintains its Overweight rating and $1.50 target for EBR Systems, despite an unforgiving market (lower share price) for pre-revenue companies with large clinical development projects.

The analyst ascribes a 65% probability to trial success for SOLVE-CRT, and 75% chance for the launch of wireless stimulation endocardially (WiSE) to meet or exceed forecasts.

The latter is the only device in development offering leadless biventricular pacing, while SOLVE-CRT is the trial to assess WISE's safety and efficacy.

This report was published on February 28, 2022.

Target price is $1.50 Current Price is $0.68 Difference: $0.82
If EBR meets the Wilsons target it will return approximately 121% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.89 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.28.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 18.18 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.74.

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

FLT    FLIGHT CENTRE TRAVEL GROUP LIMITED

Travel, Leisure & Tourism – Overnight Price: $18.18

JP Morgan rates ((FLT)) as Underweight (5) –

Following 1H results for Flight Centre Travel Group, JP Morgan believes the business is on track to reach a return to monthly profitability in FY22 as per guidance. On current run-rates, Corporate will be profitable in March/April and Leisure in the late 4Q.

Management expects a return to pre-covid total transaction value (TTV) in 18-24 months. The broker raises its target price to $15 from $14 and maintains an Underweight rating.

This report was published on February 25, 2022.

Target price is $15.00 Current Price is $18.18 Difference: minus $3.18 (current price is over target).
If FLT meets the JP Morgan target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $18.50, suggesting upside of 5.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 95.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -100.8, 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:

JP Morgan forecasts a full year FY23 dividend of 41.00 cents and EPS of 67.00 cents.
At the last closing share price the estimated dividend yield is 2.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.4, implying annual growth of N/A.
Current consensus DPS estimate is 13.9, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 27.6.

Market Sentiment: -0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MPL    MEDIBANK PRIVATE LIMITED

Insurance – Overnight Price: $3.05

Jarden rates ((MPL)) as Upgrade to Overweight from Neutral (2) –

Following interim results, Jarden upgrades its rating for Medibank Private to Overweight from Neutral in the belief customer support initiatives are leading to persistent tailwinds.

The broker believes management's deferral of the April 2022 premium rate rise will lead to the continuation of lower policy downgrading trends. Thus, healthy margins are expected to persist.

First half profit of $220m was well above Jarden's $201m estimate due to stronger investment income. Despite EPS upgrades the target falls to $3.45 from $3.50 on lower market multiples.

This report was published on February 28, 2022.

Target price is $3.45 Current Price is $3.05 Difference: $0.4
If MPL meets the Jarden target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $3.41, suggesting upside of 6.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 13.50 cents and EPS of 16.30 cents.
At the last closing share price the estimated dividend yield is 4.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.3, implying annual growth of -4.5%.
Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 14.90 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.5, implying annual growth of 7.8%.
Current consensus DPS estimate is 13.6, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 19.4.

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

PPG    PRO-PAC PACKAGING LIMITED

Paper & Packaging – Overnight Price: $1.34

Moelis rates ((PPG)) as Downgrade to Hold from Buy (3) –

Following 1H results for Pro-Pac Packaging, Moelis reduces FY23 and FY24 EPS forecasts by -11.3% and -12.1%, to reflect ongoing covid-induced supply chain disruptions and tough operating macro conditions.

Thus, the target price falls to $1.36 from $1.84 and the broker's rating falls to Hold from Buy.

Headwinds from rising raw material costs persist, with the key input resin nearing five-year highs, and increased labour costs have arisen from additional overtime pay (clearing backlog of products), explains the analyst.

The broker points out some of the margin pressure will be alleviated by price increases pushed through in the backend of the 1H.

This report was published on February 28, 2022.

Target price is $1.36 Current Price is $1.34 Difference: $0.02
If PPG meets the Moelis target it will return approximately 1% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 3.80 cents and EPS of 11.10 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.07.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 7.50 cents and EPS of 16.60 cents.
At the last closing share price the estimated dividend yield is 5.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.07.

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

QUB    QUBE HOLDINGS LIMITED

Transportation & Logistics – Overnight Price: $2.97

JP Morgan rates ((QUB)) as Overweight (1) –

First half results for Qube Holdings exceeded JP Morgan's expectations with strong growth in the operating division and Patrick was also ahead of forecasts. A 2% rise in container freight volumes in the 1H was considered a big positive for these two divisions. 

The Overweight rating is kept. The broker notes additional share price support from the $400m in announced capital management initiatives (the form is yet to be confirmed). A fully franked dividend of 3.0cps was declared. The target rises to $3.80 from $3.60.

The analyst points out ongoing cost pressures and lower revenue in NZ forestry exports suppressed group margins. 

This report was published on February 25, 2022.

Target price is $3.80 Current Price is $2.97 Difference: $0.83
If QUB meets the JP Morgan target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $3.32, suggesting upside of 11.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 6.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 2.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.5, implying annual growth of 96.7%.
Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 31.3.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 7.00 cents and EPS of 11.00 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 27.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.1, implying annual growth of 16.8%.
Current consensus DPS estimate is 6.9, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 26.8.

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

REG    REGIS HEALTHCARE LIMITED

Aged Care & Seniors – Overnight Price: $2.14

JP Morgan rates ((REG)) as Neutral (3) –

Following 1H profits for Regis Healthcare that were in-line with JP Morgan's forecast, the broker raises its FY22 earnings (EBITDA) forecast by 2% due to a smaller-than-expected omicron impact. 

While the outlook for the sector has improved, the broker retains its Neutral rating as some promised reforms (new shadow assessments of the new ANACC system) may be delayed by covid and the impending federal election. The target falls to $2.10 from $2.25.

This report was published on February 25, 2022.

Target price is $2.10 Current Price is $2.14 Difference: minus $0.04 (current price is over target).
If REG meets the JP Morgan target it will return approximately minus 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $2.03, suggesting downside of -2.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 8.00 cents and EPS of 8.00 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 26.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.7, implying annual growth of -59.3%.
Current consensus DPS estimate is 7.0, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 77.4.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 10.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 4.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.9, implying annual growth of 7.4%.
Current consensus DPS estimate is 8.6, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 72.1.

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

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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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