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Australian Broker Call *Extra* Edition – Mar 03, 2022

Daily Market Reports | Mar 03 2022

This story features AUDIO PIXELS HOLDINGS LIMITED, and other companies. For more info SHARE ANALYSIS: AKP

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)

AKP   ALQ   AOF   APX   BIO   BTN   DDR   DSE   EOS   EVO   FZO   GDG   IGO   IVC   MTO   MVP   OVN   SFR   SHM   SIG   TOY   WPR  

AKP    AUDIO PIXELS HOLDINGS LIMITED

Hardware & Equipment – Overnight Price: $19.12

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

Petra Capital believes the key positive from Audio Pixels' FY21 results is the ongoing progress towards mass production of its audio chip. The company recently announced a manufacturing agreement with a China-based semiconductor manufacturer.

The agreement coincides with substantial completion of the designs for the company's demonstration systems for customer validations.

The analyst estimates the company has sufficient cash (less than six months funding) to validate its digital speaker. A capital raise in 2022 is assumed.

Forecasts are unchanged and the broker maintains its Buy rating and $38.48 target.

This report was published on March 1, 2022.

Target price is $38.48 Current Price is $19.12 Difference: $19.36
If AKP meets the Petra Capital target it will return approximately 101% (excluding dividends, fees and charges).

Forecast for FY22:

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 36.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 53.11.

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

ALQ    ALS LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $12.81

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

ALS Ltd has alleviated concern that its Geochemistry business would not be able to deliver on growth expectations, with strength in sampling flows and pricing largely driving Jarden's updates. 

The company also updated its earnings outlook; net profit guidance for FY22 increases to $260-265m from the $242-252m guided to in first half results. Earnings per share forecasts have increased 7.4%, 5.0% and 2.9% through to FY24.

The rating is upgraded to Overweight from Neutral and the target price increases to $13.80 from $13.25.

This report was published on March 2, 2022.

Target price is $13.80 Current Price is $12.81 Difference: $0.99
If ALQ meets the Jarden target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $13.65, suggesting upside of 6.6%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 33.00 cents and EPS of 54.10 cents.
At the last closing share price the estimated dividend yield is 2.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.0, implying annual growth of 48.1%.
Current consensus DPS estimate is 31.7, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 24.2.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 35.00 cents and EPS of 58.10 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.9, implying annual growth of 11.1%.
Current consensus DPS estimate is 34.5, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 21.7.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AOF    AUSTRALIAN UNITY OFFICE FUND

REITs – Overnight Price: $2.50

Moelis rates ((AOF)) as Hold (3) –

The first half operating result for Australian Unity Office Fund was largely in-line with the expectations held by Moelis. Guidance remains unchanged.

The broker maintains a Hold rating given the top three tenants, who account for 59% of income, are likely to partially/wholly vacate over the next three years, combined with meaningful capital requirements.

The analyst lowers earnings estimates, factoring in increased down-time following pending expiries, though the $2.38 target remains unchanged.

This report was published on March 2, 2022.

Target price is $2.38 Current Price is $2.50 Difference: minus $0.12 (current price is over target).
If AOF meets the Moelis target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 15.20 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 6.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.59.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 10.20 cents and EPS of 12.40 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.16.

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

APX    APPEN LIMITED

IT & Support – Overnight Price: $7.22

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

Cannacord Genuity reviews Appen's prospects after the market dumped the shares in response to a narrow earnings (EBITDA) miss (one of several) and the cessation of forward guidance.

While the stock has bounced off a 52-week low, the broker considers EBITDA guidance to be unreliable and believes the cessation of guidance to be sensible. The broker notes the main problem is the lack of revenue visibility given revenue is skewed heavily to the fourth quarter.

Cannacord Genuity is switching focus to the five-year plan and $900m revenue target, which implies a 15% compound annual growth rate, and says, if achieved, Appen would appear severely undervalued.

The broker has rejigged its modelling to backweight revenue growth, assuming later growth, and adjusts the target price closer to the weighted average cost of capital with a slight premium to create a margin for safety. Forecasts fall -24% to -25% in FY22.

Target price falls to $8 from $12.70. Rating downgraded to Hold from Buy.

This report was published on March 2, 2022.

Target price is $8.00 Current Price is $7.22 Difference: $0.78
If APX meets the Canaccord Genuity target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $8.21, suggesting upside of 13.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.08 cents and EPS of 32.10 cents.
At the last closing share price the estimated dividend yield is 0.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.9, implying annual growth of 22.7%.
Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 19.1.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.09 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 0.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.5, implying annual growth of 1.6%.
Current consensus DPS estimate is 9.9, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 18.8.

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

BIO    BIOME AUSTRALIA LIMITED

Overnight Price: $0.09

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

Biome Australia's December first-half result met Cannacord Genuity's forecasts thanks to a strong performance from the Activated Probiotics brand and an improvement in gross margins, but operating expenditure rose.

The broker expects the company may have to raise funds given cash is dangerously low and the burn continues.

The health practitioner channel increased to 20% of sales from 16% in FY21, while the pharmacy channel slipped to 64% of sales from 70%.

The broker extends loss forecasts and cuts the target price to 21c from 31c to account for an assumed equity raising. Speculative buy rating retained.

This report was published on March 1, 2022.

Target price is $0.23 Current Price is $0.09 Difference: $0.14
If BIO meets the Canaccord Genuity target it will return approximately 156% (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 2.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.46.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.00.

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

BTN    BUTN LIMITED

Overnight Price: $0.26

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

Butn's maiden December first-half result pleased Cannacord Genuity thanks to strong growth in originations and a reduction in funding on the bond structure. 

Balance sheet metrics were good, the broker noting origination capacity has risen to $300m, which compares with the $260m run rate at present.

The company recently announced a partnership with Mysale, signalling its entrance to the retail market where it plans to offer factoring services to MYSALES suppliers. Butn has also struck a platform partnership with Freightlancer and OZEDI.

Cannacord says the activity highlights the synergies between business software and fintech. EPS loss forecasts are extended.

Speculative Buy rating and 55c target price retained.

This report was published on March 1, 2022.

Target price is $0.55 Current Price is $0.26 Difference: $0.29
If BTN meets the Canaccord Genuity target it will return approximately 112% (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 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.67.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.67.

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

DDR    DICKER DATA LIMITED

Hardware & Equipment – Overnight Price: $13.75

Petra Capital rates ((DDR)) as Hold (3) –

Dicker Data has delivered a strong full result, comments Petra Capital, growing net profit 29% to $73.6 on the back of 24% sales growth.

The broker notes the Exceed Group acquisition performed better than expected despite not yet providing a full year contribution. 

Looking forward, the broker expects the company to benefit from a sustained competitive position and annualised benefits from acquisitions, with the company expected to grow at an annual compound rate of 11% through to FY24. 

The Hold rating is retained and the target price increased to $14.52 from $14.40.

This report was published on March 1, 2022.

Target price is $14.52 Current Price is $13.75 Difference: $0.77
If DDR meets the Petra Capital target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Petra Capital forecasts a full year FY22 dividend of 42.00 cents and EPS of 50.30 cents.
At the last closing share price the estimated dividend yield is 3.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.34.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 50.50 cents and EPS of 53.70 cents.
At the last closing share price the estimated dividend yield is 3.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.61.

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

DSE    DROPSUITE LIMITED

Cloud services – Overnight Price: $0.19

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

Dropsuite's FY21 pre-released result pleased Cannacord Genuity, the company clocking extremely strong market share gains.

Revenue grew 66% in the year, sharply outpacing growth in operating expenditure of 14%, allowing the company to reinvest internally.

Cannacord Genuity says the company is preparing for a breakout year, thanks to strong  momentum in annual recurring revenue, conversion on M&A actions, and the launch of proprietary products.

The broker expects the company's simple user interface, military-grade encryption, ease of partner integration, unique insights and analytics, reliability and strong customer support will ensure the company continues to growth market share.

Buy rating and 30c target price retained.

This report was published on March 1, 2022.

Target price is $0.30 Current Price is $0.19 Difference: $0.11
If DSE meets the Canaccord Genuity target it will return approximately 58% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

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 95.00.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 190.00.

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

EOS    ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED

Hardware & Equipment – Overnight Price: $1.82

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

Electro Optic Systems' December FY21 result met guidance and Petra Capital's forecasts, a sharp rise in growth-focused operating expenditure, tax expense and revenue deferrals overwhelming strong sales. No guidance was provided.

Revenue was strong, Communications and Defence sales forging ahead but Space sales fell sharply.

Despite the loss, the company's operating cash finished the half at $0.9m, which compared to an outflow of -$109m in the previous corresponding period.

Overall, the broker appreciates the solid progress on Defence contract wins, Spacelink funding, and the conversion of contract assets to cash.

The broker downgrades earnings forecasts to reflect revenue deferrals and higher costs, and cuts the target price to $4.80 from $5.09. Buy rating retained.

This report was published on March 1, 2022.

Target price is $4.80 Current Price is $1.82 Difference: $2.98
If EOS meets the Petra Capital target it will return approximately 164% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Petra Capital forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 9.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 18.38.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 6.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 26.38.

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

EVO    EVOLVE EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.77

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

Evolve Education's 2021 result met December guidance and Cannacord Genuity's forecasts, as lockdowns continued to affect earnings.

The broker notes omicron is only beginning to spread to New Zealand where further lockdowns are expected, and management has  withdrawn 2022 guidance.

The broker also reduces acquisition assumptions given market multiples.

Target price falls to NZ90c from NZ87c. Rating is downgraded to Hold from Buy.

This report was published on March 2, 2022.

Current Price is $0.77. Target price not assessed.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
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: $0.41

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

Family Zone Cyber Safety’s largely pre-released December first-half result outpaced Shaw and Partners' forecasts by 5% and management guided to strong March-quarter trading.

The company announced the acquisition of Cipafilter in the US, which should boost annual recurring revenue (organic ARR growth is running at 40% a year).

The broker notes the company is trading at a -50% discount to de-rated emerging cloud competitors and considers the company to be materially undervalued. The broker notes Family Zone Cyber Safety is experiencing growing operating leverage, and estimates the company will reach breakeven in FY24 on the current trajectory.

Target price decreases to 85c from $1.04 to reflect peer de-rating. Buy rating retained.

This report was published on March 2, 2022.

Target price is $0.85 Current Price is $0.41 Difference: $0.44
If FZO meets the Shaw and Partners target it will return approximately 107% (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 4.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.37.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.64.

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

GDG    GENERATION DEVELOPMENT GROUP LIMITED

Wealth Management & Investments – Overnight Price: $1.53

Moelis rates ((GDG)) as Buy (1) –

Generation Development delivered record inflows in the first half, with sales inflows of $341m up 107% on the previous comparable period and bringing total funds under management to $2.1bn. Moelis notes Lonsec also grew funds under management to $2.7bn, up 116%.

The company's Lonsec Group stake provided a $1m earnings benefit in the half, and looking ahead, the broker expects following an investment year in FY22 that Lonsec Group will grow earnings at a more than 15% compound annual growth rate through to FY25. 

The Buy rating is retained and the target price increases to $1.89 from $1.71.

This report was published on February 28, 2022.

Target price is $1.89 Current Price is $1.53 Difference: $0.36
If GDG meets the Moelis target it will return approximately 24% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 2.00 cents and EPS of 3.20 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.81.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 2.00 cents and EPS of 4.20 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.43.

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

IGO    IGO LIMITED

Nickel – Overnight Price: $11.79

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

IGO has announced it will not go ahead with the acquisition of the Cobar CSA Copper Mine. Shaw and Partners finds benefit in this decision, noting it allows the company to focus on delivering returns from its current portfolio. 

The broker warns IGO will likely remain alert to merger and acquisition opportunity, and a bolt on in the near- or medium-term remains likely. 

The Buy rating and target price of $13.00 are retained.

This report was published on March 2, 2022.

Target price is $13.00 Current Price is $11.79 Difference: $1.21
If IGO meets the Shaw and Partners target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $13.12, suggesting upside of 11.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 18.00 cents and EPS of 48.50 cents.
At the last closing share price the estimated dividend yield is 1.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.8, implying annual growth of 77.2%.
Current consensus DPS estimate is 9.8, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 27.5.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 24.00 cents and EPS of 75.10 cents.
At the last closing share price the estimated dividend yield is 2.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 116.5, implying annual growth of 172.2%.
Current consensus DPS estimate is 28.7, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 10.1.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IVC    INVOCARE LIMITED

Consumer Products & Services – Overnight Price: $12.55

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

InvoCare's 2021 result outpaced Moelis's forecasts, thanks to a recovery in volumes, strong prices and margin expansion.

Management guided to a tough March quarter due to covid, staffing and weather disruptions, but the broker expects a recovery through 2022 to 2024 as funeral numbers normalise post covid.

Rating downgraded to Hold from Buy. Target price is $13.25.

This report was published on February 28, 2022.

Target price is $13.25 Current Price is $12.55 Difference: $0.7
If IVC meets the Moelis target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $12.53, suggesting downside of -0.2%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 31.90 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 2.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.7, implying annual growth of -34.6%.
Current consensus DPS estimate is 27.2, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 34.2.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 39.00 cents and EPS of 37.30 cents.
At the last closing share price the estimated dividend yield is 3.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.4, implying annual growth of 18.3%.
Current consensus DPS estimate is 30.5, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 28.9.

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

MTO    MOTORCYCLE HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $3.08

Moelis rates ((MTO)) as Buy (1) –

First half results for Motorcycle Holdings were largely pre-reported and held few surprises for Moelis. While no guidance was supplied, management noted increased market demand and strong trading conditions despite headwinds from supply chain issues and covid.

While earnings forecasts are upgraded 5-7% over FY22-24 , the analyst also assumes margins reduce over the course of FY23/24 to mid cycle levels. The broker retains its $3.74 target and Buy rating and points to significant M&A opportunities.

This report was published on March 2, 2022.

Target price is $3.74 Current Price is $3.08 Difference: $0.66
If MTO meets the Moelis target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 21.30 cents and EPS of 35.30 cents.
At the last closing share price the estimated dividend yield is 6.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.73.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 18.20 cents and EPS of 30.60 cents.
At the last closing share price the estimated dividend yield is 5.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.07.

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

MVP    MEDICAL DEVELOPMENTS INTERNATIONAL LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $4.49

Moelis rates ((MVP)) as Buy (1) –

A slightly weaker than expected first half result was delivered by Medical Developments International, which Moelis notes was largely due to hospital restrictions in the second quarter. Revenue of $9.6m was a -23.6% decline, and a net profit loss of -$7.4m was reported. 

Australian Penthrox treatment sales rebounded to pre-covid levels, while sales in Europe proved weaker than expected. With the US FDA lifting its hold on Penthrox, expect commercialisation in the region in around four years, says the broker.

The Buy rating is retained and the target price increases to $5.48 fro $5.40.

This report was published on March 2, 2022.

Target price is $5.48 Current Price is $4.49 Difference: $0.99
If MVP meets the Moelis target it will return approximately 22% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 18.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.67.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 14.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 30.75.

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

OVN    OVENTUS MEDICAL LIMITED

Medical Equipment & Devices – Overnight Price: $0.05

Canaccord Genuity rates ((OVN)) as Downgrade to Speculative Buy from Buy (1) –

Oventus Medical's December first-half result fell well short of Cannacord Genuity's forecasts due to covid.

The broker notes the company has had to structure a different distribution model in the past year, placing it well behind trajectory.

New management has announced several initiatives to push towards profitability but the broker says this will require significant capital and take time.

Target price falls to 14c from 29c. Rating is downgraded to Speculative Buy from Buy.

This report was published on March 1, 2022.

Target price is $0.14 Current Price is $0.05 Difference: $0.09
If OVN meets the Canaccord Genuity target it will return approximately 180% (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 2.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.92.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 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 2.50.

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

SFR    SANDFIRE RESOURCES LIMITED

Copper – Overnight Price: $6.22

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

Sandfire Resource's December first-half earnings fell sharply short of Cannacord Genuity's forecasts, due to hedging losses and lower realised revenue.

Operating costs, expensed exploration and inventories, and lower depreciation and amortisation all outpaced, cushioning impacts.

The miner announced a 3c dividend, compared with 8c in the previous corresponding period.

Rating downgraded to Hold from Buy. Target price falls to $7.25 from $8.25. 

This report was published on February 28, 2022.

Target price is $7.25 Current Price is $6.22 Difference: $1.03
If SFR meets the Canaccord Genuity target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $7.31, suggesting upside of 17.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 8.00 cents and EPS of 46.00 cents.
At the last closing share price the estimated dividend yield is 1.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.8, implying annual growth of N/A.
Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 11.6.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 10.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 1.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.6, implying annual growth of -35.7%.
Current consensus DPS estimate is 8.3, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 18.0.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SHM    SHRIRO HOLDINGS LIMITED

Overnight Price: $1.02

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

Shriro Holdings' December first-half result pleased Petra Capital, despite a fall in net profit from the strong June 2021 half, particularly the retention of the "exceptional" dividend yield.

No earnings guidance was provided but management says the second half is off to a good start.

The broker remains cautious believing inflation may erode margins and downgrades profit forecasts to reflect further weakness in A&NZ sales.

Buy rating retained. Target price rises to $1.44 from $1.36, the broker admiring the positive balance sheet, growth strategy, brand portfolio, positive M&A potential and a good return-on-investment-capital to weighted average cost of capital differential.

This report was published on March 1, 2022.

Target price is $1.44 Current Price is $1.02 Difference: $0.42
If SHM meets the Petra Capital target it will return approximately 41% (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 12.50 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 12.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.80.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 11.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 10.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.80.

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

SIG    SIGMA HEALTHCARE LIMITED

Health & Nutrition – Overnight Price: $0.49

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

Sigma Healthcare upgraded full year guidance, expecting earnings growth of 10-15% on the previous comparable period compared to prior guidance of a -10% decline. Shaw and Partners notes rapid antigen test sales drove the increase. 

The company benefited from a sudden increase in demand for the diagnostic tool in the month leading up to its financial year close. Shaw and Partners notes a profit loss of -$5-10m is still expected for the year, with results to be released in late March. 

The Buy rating and target price of $0.60 are retained. 

This report was published on March 3, 2022.

Target price is $0.60 Current Price is $0.49 Difference: $0.11
If SIG meets the Shaw and Partners target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $0.51, suggesting upside of 4.1%(ex-dividends)
The company's fiscal year ends in January.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 1.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 2.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.7, implying annual growth of -22.4%.
Current consensus DPS estimate is 1.8, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 10.4.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 1.30 cents and EPS of 2.00 cents.
At the last closing share price the estimated dividend yield is 2.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of 29.8%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 8.0.

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

TOY    TOYS 'R' US ANZ LIMITED

Retailing – Overnight Price: $0.15

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

Toys 'R' Us ANZ has reported a strong December-quarter trading update, boosting e-commerce revenue 86%, suggesting a December-half revenue broadly in line with Cannacord Genuity's forecasts. The company reports first-half results in March.

But intra-quarter growth shows January revenue accelerating 136%, outpacing consensus forecasts, says the broker.

Otherwise, it was steady as she goes and Cannacord Genuity believes the next December half should prove transformation, thanks to an expanded facility, campaign launch of Babies 'R' Us in Australia and the UK.

Canaccord retains its Buy rating and $0.25 target price, believing the stock represents strong value after the recent de-rating.

This report was published on March 2, 2022.

Target price is $0.25 Current Price is $0.15 Difference: $0.1
If TOY meets the Canaccord Genuity target it will return approximately 67% (excluding dividends, fees and charges).
The company's fiscal year ends in July.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 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 150.00.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.00 cents.

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

WPR    WAYPOINT REIT LIMITED

REITs – Overnight Price: $2.71

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

FY21 distributable earnings for Waypoint REIT were in-line with JP Morgan's forecast.

FY22 guidance of 16.44cpu assumes -$150m in asset sales and $100m in capital management initiatives.

Meanwhile, the REIT has announced a diversification strategy that will expand its investment mandate beyond service stations. All asset classes are on the table provided they meet return hurdles, income security and low management intensity.

The broker retains its Overweight rating and lowers its target to $3.30 from $3.40.

This report was published on March 1, 2022.

Target price is $3.30 Current Price is $2.71 Difference: $0.59
If WPR meets the JP Morgan target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $2.92, suggesting upside of 7.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 17.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 6.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.1, implying annual growth of -71.8%.
Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 16.8.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 17.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 6.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.7, implying annual growth of 3.7%.
Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 16.2.

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

AKP ALQ AOF APX BIO BTN DDR DSE EOS EVO FZO GDG IGO IVC MTO MVP OVN SFR SHM SIG TOY WPR

For more info SHARE ANALYSIS: AKP - AUDIO PIXELS HOLDINGS LIMITED

For more info SHARE ANALYSIS: ALQ - ALS LIMITED

For more info SHARE ANALYSIS: AOF - AUSTRALIAN UNITY OFFICE FUND

For more info SHARE ANALYSIS: APX - APPEN LIMITED

For more info SHARE ANALYSIS: BIO - BIOME AUSTRALIA LIMITED

For more info SHARE ANALYSIS: BTN - BUTN LIMITED

For more info SHARE ANALYSIS: DDR - DICKER DATA LIMITED

For more info SHARE ANALYSIS: DSE - DROPSUITE LIMITED

For more info SHARE ANALYSIS: EOS - ELECTRO OPTIC SYSTEMS HOLDINGS LIMITED

For more info SHARE ANALYSIS: EVO - EVOLVE EDUCATION GROUP LIMITED

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

For more info SHARE ANALYSIS: GDG - GENERATION DEVELOPMENT GROUP LIMITED

For more info SHARE ANALYSIS: IGO - IGO LIMITED

For more info SHARE ANALYSIS: IVC - INVOCARE LIMITED

For more info SHARE ANALYSIS: MTO - MOTORCYCLE HOLDINGS LIMITED

For more info SHARE ANALYSIS: MVP - MEDICAL DEVELOPMENTS INTERNATIONAL LIMITED

For more info SHARE ANALYSIS: OVN - OVENTUS MEDICAL LIMITED

For more info SHARE ANALYSIS: SFR - SANDFIRE RESOURCES LIMITED

For more info SHARE ANALYSIS: SHM - SHRIRO HOLDINGS LIMITED

For more info SHARE ANALYSIS: SIG - SIGMA HEALTHCARE LIMITED

For more info SHARE ANALYSIS: TOY - TOYS 'R' US ANZ LIMITED

For more info SHARE ANALYSIS: WPR - WAYPOINT REIT LIMITED