Australian Broker Call *Extra* Edition – Apr 05, 2022

Daily Market Reports | Apr 05 2022

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)

AIZ   COL   CYG   EDV   HVN   JBH   JLG   MCL   MTS   STO   TOY   TSI   TWE   UNI   WES   WOW  

AIZ    AIR NEW ZEALAND LIMITED

Transportation & Logistics - Overnight Price: $0.89

Jarden rates ((AIZ)) as Sell (5) -

Air New Zealand announced a NZ$1.2bn equity raise as part of a $2.2bn recapitalisation that also includes NZ$600m of redeemable shares and a new NZ$400m four-year Crown loan. Jarden notes the government has committed to the purchase of NZ$602m of new shares.

The broker expects NZ$850m will be used to pay off the existing Crown loan, while NZ$950m will recapitalise the balance sheet and the NZ$400m loan facility will remain undrawn.

The company also updated full year loss to be less than -NZ$800m (previously exceeding -NZ$800m) and expects positive operating cash flow from the first quarter of FY23. 

The Sell rating is retained and the target price decreases to NZ$0.65 from NZ$0.80.

This report was published on March 30, 2022.

Current Price is $0.89. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 36.75 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.42.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.85 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 104.95.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

COL    COLES GROUP LIMITED

Food, Beverages & Tobacco - Overnight Price: $17.90

Goldman Sachs rates ((COL)) as Neutral (3) -

In its first edition of The Race for the New Digital Consumer, Goldman Sachs has initiated coverage on the food and beverage sector and home retailers. 

The broker says that while these companies have benefited from covid-induced in-home consumption, normalisation and cost inflation will come home to bite, and suggests that those retailers that capitalise on the consumer's digital shift will be better able to manage growing complexity and volatility; be it through BNPL and omni-channel commerce, multi-screen connectivity, and personalised content.

In this respect, Goldman Sachs favours food and beverage retailers over home retailers.

The analysts resumes coverage of Coles Group with a Neutral rating and $16.40 target price. This compares with the broker's last rating in the FNArena database for Coles in May '21 of a Buy rating and $20.50 target price.

Goldman Sachs considers Coles to be less advanced in digital and data capabilities than Woolworths ((WOW)), but expects Coles will offer a better inflation defense in the short term given it enjoys a modicum of protection from global supply chain disruptions due to greater local sourcing of produce.

But in the medium to long term, the broker believes Coles' lower quality consumer data assets will result in a widening market-share gap.

This report was published on March 27, 2022.

Target price is $16.40 Current Price is $17.90 Difference: minus $1.5 (current price is over target).
If COL meets the Goldman Sachs target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $18.81, suggesting upside of 5.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 58.80 cents and EPS of 73.50 cents.
At the last closing share price the estimated dividend yield is 3.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.8, implying annual growth of 0.6%.
Current consensus DPS estimate is 60.7, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 23.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 62.00 cents and EPS of 74.40 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 82.7, implying annual growth of 9.1%.
Current consensus DPS estimate is 65.9, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 21.6.

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

CYG    COVENTRY GROUP LIMITED

Hardware & Equipment - Overnight Price: $1.62

Shaw and Partners rates ((CYG)) as Buy (1) -

Coventry Group has finalised two Trade Distribution bolt-on acqusiitions to be funded through the company's existing debt facility: Goudie Holding and NZ Planks Limited for NZ$9m; and Fraser Coast Bolts and Industrial Supplies for $2.8m.

Shaw and Partners considers the acquisition price attractive and forecasts mid to high-single digit EPS accretion over three years. 

The broker expects the balance sheet is most likely approaching capacity after the recent inventory build and acquisitions but expects the inventory should convert to high-margin sales in the near term.

EPS forecasts rise 3% in FY22, 9% in FY23 and 8% in FY24. Buy rating retained. Target price rises to $2.33 from $2.23, representing a total shareholder return of 46%.

This report was published on April 4, 2022.

Target price is $2.33 Current Price is $1.62 Difference: $0.71
If CYG meets the Shaw and Partners target it will return approximately 44% (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 3.00 cents and EPS of 11.80 cents.
At the last closing share price the estimated dividend yield is 1.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.73.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 4.00 cents and EPS of 16.80 cents.
At the last closing share price the estimated dividend yield is 2.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.64.

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


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