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Australian Broker Call *Extra* Edition – Apr 07, 2022

Daily Market Reports | Apr 07 2022

This story features CENTURIA INDUSTRIAL REIT, and other companies. For more info SHARE ANALYSIS: CIP

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)

CIP   CPU   DEG   DGO   IAG   MYX   NAN   PDL   PDN   PPT   SRG  

CIP    CENTURIA INDUSTRIAL REIT

REITs – Overnight Price: $3.89

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

While Centuria Industrial REIT has demonstrated strong performance in recent years, Shaw and Partners considers there is remaining upside as high demand for industrial assets is expected to continue through 2022. 

The broker posits the coupling of a record low 1.3% national vacancy rate in the second half of 2021 and strong investment volumes in that year indicate likely rental growth and investor demand that should positively impact on valuations.

Centuria Industrial REIT's $4.0bn portfolio has a 99.2% occupancy rate, and the broker predicts funds from operations of 18.3c per unit and dividends of 17.3c per unit in the current financial year, equating to a 94.5% payout ratio. 

The Buy rating is retained and the target price increases to $4.30 from $4.10.

This report was published on April 5, 2022.

Target price is $4.30 Current Price is $3.89 Difference: $0.41
If CIP meets the Shaw and Partners target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $4.21, suggesting upside of 8.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 17.30 cents and EPS of 18.30 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.2, implying annual growth of -84.5%.
Current consensus DPS estimate is 17.5, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 21.4.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 18.00 cents and EPS of 19.50 cents.
At the last closing share price the estimated dividend yield is 4.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.2, implying annual growth of 5.5%.
Current consensus DPS estimate is 18.1, implying a prospective dividend yield of 4.7%.
Current consensus EPS estimate suggests the PER is 20.3.

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

CPU    COMPUTERSHARE LIMITED

Diversified Financials – Overnight Price: $25.22

Jarden rates ((CPU)) as Overweight (2) –

Jarden expects Computershare will benefit from improving US mortgage service trends. The broker anticipates margins to rebound in the coming financial year as refinancing slows and foreclosures recommence amid higher margin income. 

Despite likely margin improvement ahead, Jarden notes reaching its 12-14% return on invested capital target will be challenging for Computershare, with the broker forecasting an 8% long-term return. 

The Overweight rating is retained and the target price increases to $24.00 from $23.55.

This report was published on April 5, 2022.

Target price is $24.00 Current Price is $25.22 Difference: minus $1.22 (current price is over target).
If CPU meets the Jarden target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $23.92, suggesting downside of -5.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 64.92 cents and EPS of 77.09 cents.
At the last closing share price the estimated dividend yield is 2.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.8, implying annual growth of N/A.
Current consensus DPS estimate is 57.1, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 33.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 64.92 cents and EPS of 114.15 cents.
At the last closing share price the estimated dividend yield is 2.57%.
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 103.0, implying annual growth of 37.7%.
Current consensus DPS estimate is 68.6, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 24.5.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

DEG    DE GREY MINING LIMITED

Gold & Silver – Overnight Price: $1.21

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

De Grey Mining's top shareholder DGO Gold ((DGO)) has backed a takeover offer from Gold Road Resources ((GOR)) for a consideration of two Gold Road Resources shares for every DGO Gold share, implying $3.49 per DGO Gold share. 

Bell Potter consider's DGO Gold's 14.4% holding in De Grey Mining to be its prime asset, and a likely motivator behind the takeover bid.

The broker notes this could indicate Gold Road Resources intends to make a play for De Grey Mining and its 9.0m ounce Mallina gold project. 

The Buy rating is retained and the target price decreases to $1.72 from $1.74. 

This report was published on April 5, 2022.

Target price is $1.72 Current Price is $1.21 Difference: $0.51
If DEG meets the Bell Potter target it will return approximately 42% (excluding dividends, fees and charges).

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

DGO    DGO GOLD LIMITED

Gold & Silver – Overnight Price: $3.38

Bell Potter rates ((DGO)) as Downgrade to Hold from Buy (3) –

The DGO Gold board has recommended a takeover offer from Gold Road Resources ((GOR)) for 2.16 shares per DGO Gold share. The offer equates to $3.55 per share, or a total $308m. Bell Potter does not rule out the possibility of a competing takeover offer. 

While DGO Gold has traded at a material discount to the market value of its listed investments since mid-2020, Bell Potter believes value exists in the company's 14.4% stake in De Gray Mining ((DEG)), and the latter's 100% owned Mallina gold project, not yet reflected in valuation. 

The rating is downgraded to Hold from Buy and the target price decreases to $4.37 from $4.41.

This report was published on April 5, 2022.

Target price is $4.37 Current Price is $3.38 Difference: $0.99
If DGO meets the Bell Potter target it will return approximately 29% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 19.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.98.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 6.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 51.21.

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

IAG    INSURANCE AUSTRALIA GROUP LIMITED

Insurance – Overnight Price: $4.38

Jarden rates ((IAG)) as Buy (1) –

Insurance Australia Group should not be materially impacted by any fall-out from the Tokio Marine-Greensill legal battle given it carries no net insurance exposure to Greensill, according to Jarden. 

Japanese insurer Tokio Marine claims Greensill took out insurance policies fraudulently, written by Insurance Australia Group's previously 50%-owned The Bond and Credit Co, alleging Greensil misrepresented matters material to the underwriting of policies.

The broker notes company commentary suggests Tokio Marine will contest the validity of insurance contracts, while financial risk for Insurance Australia Group appears well-contained for now.

The Buy rating and target price of $5.40 are retained.

This report was published on April 5, 2022.

Target price is $5.40 Current Price is $4.38 Difference: $1.02
If IAG meets the Jarden target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $4.98, suggesting upside of 13.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 16.00 cents and EPS of 20.30 cents.
At the last closing share price the estimated dividend yield is 3.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.6, implying annual growth of N/A.
Current consensus DPS estimate is 17.6, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 22.3.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 27.00 cents and EPS of 31.70 cents.
At the last closing share price the estimated dividend yield is 6.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.8, implying annual growth of 46.9%.
Current consensus DPS estimate is 24.6, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 15.2.

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

MYX    MAYNE PHARMA GROUP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.25

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

Following segmental data released by Mayne Pharma with its first half result, Wilsons notes three of the company's four business segments are in growth but considerable debt impacts on the company's ability to pursue inorganic growth in the near-term.

The broker considers there is value in the company's Metrics Contract Services (MCS) division so that divestment of this segment could remove debt and leave a specialty pharmaceuticals business in growth, and notes valuation upside to this scenario. 

The Overweight rating is retained and the target price decreases to $0.32 from $0.37.

This report was published on April 5, 2022.

Target price is $0.32 Current Price is $0.25 Difference: $0.07
If MYX meets the Wilsons target it will return approximately 28% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.36.

Forecast for FY23:

Wilsons 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 250.00.

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

NAN    NANOSONICS LIMITED

Medical Equipment & Devices – Overnight Price: $3.96

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

Changes to Nanosonics' sales model look to be positive, a view expressed not for the first time by Wilsons, noting the company stands to gain from assuming responsibility for consumables resupply as reseller GE Healthcare withdraws from directs sales, improving Nanosonics' price control. 

The broker expects a threat of being undercut by GE Healthcare has limited the company's ability to action price increases on its trophon 2 product, and notes pricing flexibility will be crucial in the back half of the US launch. 

The Overweight rating and target price of $7.00 are retained.

This report was published on April 5, 2022.

Target price is $7.00 Current Price is $3.96 Difference: $3.04
If NAN meets the Wilsons target it will return approximately 77% (excluding dividends, fees and charges).
Current consensus price target is $4.34, suggesting upside of 9.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 1.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 208.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.0, 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:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 88.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.1, 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 96.6.

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

PDL    PENDAL GROUP LIMITED

Wealth Management & Investments – Overnight Price: $5.28

Jarden rates ((PDL)) as Buy (1) –

Perpetual ((PPT)) has made a takeover bid for Pendal Group at an indicative value of $6.23 per share. Jarden notes Pendal Group has underperformed Perpetual by -35% in the last six months, offering Perpetual an opportunity to take advantage of share price weakness.

While Pendal Group's board has commenced assessment of the proposal, Jarden considers the offer opportunistic given it undercuts the broker's $6.60 target price. 

The Buy rating and target price of $6.60 are retained.

This report was published on April 5, 2022.

Target price is $6.60 Current Price is $5.28 Difference: $1.32
If PDL meets the Jarden target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $6.58, suggesting upside of 24.5%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 45.00 cents and EPS of 48.80 cents.
At the last closing share price the estimated dividend yield is 8.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.7, implying annual growth of -0.5%.
Current consensus DPS estimate is 42.9, implying a prospective dividend yield of 8.1%.
Current consensus EPS estimate suggests the PER is 10.2.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 43.40 cents and EPS of 48.30 cents.
At the last closing share price the estimated dividend yield is 8.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.6, implying annual growth of -0.2%.
Current consensus DPS estimate is 41.3, implying a prospective dividend yield of 7.8%.
Current consensus EPS estimate suggests the PER is 10.2.

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

PDN    PALADIN ENERGY LIMITED

Uranium – Overnight Price: $0.78

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

With the successful completion of its $215m equity raise coupled with the announcement of a tender award Paladin Energy has achieved two key catalysts, according to Bell Potter, moving it closer to production which could be as soon as early 2024 on the broker's estimates.

The announcement of a 2.1m pound award with Duke Energy will likely attract further interest and the possibility of additional offtake agreements. Bell Potter assumes a contracted price around US$55 per pound, with annual escalation.

The Buy rating is retained and the target price increases to $1.06 from $0.96.

This report was published on April 5, 2022.

Target price is $1.06 Current Price is $0.78 Difference: $0.28
If PDN meets the Bell Potter target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.35 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 57.69.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.35 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 57.69.

This company reports in USD. 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

PPT    PERPETUAL LIMITED

Wealth Management & Investments – Overnight Price: $32.80

Jarden rates ((PPT)) as Underweight (2) –

Perpetual has made a takeover bid for Pendal Group ((PDL)) at an indicative value of $6.23 per share. Jarden notes Pendal Group has underperformed Perpetual by -35% in the last six months, offering Perpetual an opportunity to take advantage of share price weakness.

The broker notes the acquisition could be 20% accretive to Perpetual's twelve-month earnings per share, or 37% accretive including an anticipated $50m in cost synergies. Jarden also notes a deal would offer greater diversification benefits.

The Underweight rating and target price of $30.25 are retained.

This report was published on April 4, 2022.

Target price is $30.25 Current Price is $32.80 Difference: minus $2.55 (current price is over target).
If PPT meets the Jarden target it will return approximately minus 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $39.61, suggesting upside of 20.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 202.10 cents and EPS of 243.50 cents.
At the last closing share price the estimated dividend yield is 6.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 267.1, implying annual growth of 97.9%.
Current consensus DPS estimate is 210.4, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 12.3.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 194.90 cents and EPS of 227.50 cents.
At the last closing share price the estimated dividend yield is 5.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 285.6, implying annual growth of 6.9%.
Current consensus DPS estimate is 220.8, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 11.5.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SRG    SRG GLOBAL LIMITED

Mining Sector Contracting – Overnight Price: $0.67

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

Following a second meeting of creditors, SRG Global has confirmed its $15.2m acquisition of WBHO Infrastrure WA. Shaw and Partners notes the purchase looks like a good deal for SRG Global, with the price low for a company historically generating $150m in revenue.

The acquisition also appears to require little in the way of investment or capital expenditure, and brings further growth opportunities by way of large clients, an integrated service agreement with Main Roads and a strategic position in the Kwinana industrial area, comments the broker.

The Buy rating is retained and the target price increases to $1.00 from $0.75.

This report was published on April 5, 2022.

Target price is $1.00 Current Price is $0.67 Difference: $0.33
If SRG meets the Shaw and Partners target it will return approximately 49% (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 4.40 cents.
At the last closing share price the estimated dividend yield is 4.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.23.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 3.50 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 5.22%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.17.

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

CIP CPU DEG DGO GOR IAG MYX NAN PDL PDN PPT SRG

For more info SHARE ANALYSIS: CIP - CENTURIA INDUSTRIAL REIT

For more info SHARE ANALYSIS: CPU - COMPUTERSHARE LIMITED

For more info SHARE ANALYSIS: DEG - DE GREY MINING LIMITED

For more info SHARE ANALYSIS: DGO - DGO GOLD LIMITED

For more info SHARE ANALYSIS: GOR - GOLD ROAD RESOURCES LIMITED

For more info SHARE ANALYSIS: IAG - INSURANCE AUSTRALIA GROUP LIMITED

For more info SHARE ANALYSIS: MYX - MAYNE PHARMA GROUP LIMITED

For more info SHARE ANALYSIS: NAN - NANOSONICS LIMITED

For more info SHARE ANALYSIS: PDL - PENDAL GROUP LIMITED

For more info SHARE ANALYSIS: PDN - PALADIN ENERGY LIMITED

For more info SHARE ANALYSIS: PPT - PERPETUAL LIMITED

For more info SHARE ANALYSIS: SRG - SRG GLOBAL LIMITED