Australian Broker Call *Extra* Edition – Apr 12, 2022

Daily Market Reports | Apr 12 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)

ABB   AGY   AHX   BHP   BSL   CAJ   CXO   FFX   GLN   GNC (2)   GOR   GUD   HLA   MGV   MIN   MVF   PTM   QHL   SYA   TUL   WBC  

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $5.43

JP Morgan rates ((ABB)) as Overweight (1) -

JP Morgan expects subscriber growth guidance to be upgraded at Aussie Broadband, partly because of white-label customer Origin Energy ((ORG)), which indicated broadband customers had grown above 50,000 in March.

Aussie Broadband has already recorded record subscriber growth in early 2022, and also 23,000 white label subscribers are due to be
migrated in the March quarter.

The analyst now forecasts white label subscribers to reach 300,000 in FY26, which suggests a market share of 12% in FY27 (only half of Origin Energy's target). The target price rises to $7.00 from $5.85. Overweight.

This report was published on April 8, 2022.

Target price is $7.00 Current Price is $5.43 Difference: $1.57
If ABB meets the JP Morgan target it will return approximately 29% (excluding dividends, fees and charges).
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 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 90.50.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 0.00 cents and EPS of 22.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.68.

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

AGY    ARGOSY MINERALS LIMITED

New Battery Elements - Overnight Price: $0.48

Petra Capital rates ((AGY)) as Buy (1) -

Petra Capital compares the ASX's top-10 emerging developers given the market has shifted focus to new supply as lithium prices skyrocket. 

Of the three forms of Enterprise Valuation (EV) of Resources and Reserves, the broker has opted for Lithium Carbonate Equivalent to allow comparisons across all deposit types.

Of the 10, only seven companies have published reserves. Petra notes that declaring Reserves is a much higher benchmark and the peer multiple reflects a median of $1,268/t for LCE - almost twice the EV Resource median.

Brine developers have higher capital intensities than rock developers ($21,000/t to $50,000/t compared with $3,000/t to $7,000/t) but much longer life. 

Petra Capital notes Argosy Minerals is very close to first production (mid 2022) at 2ktpa, and expects this to expand first to 12ktpa and finally to $20ktpa. But it has yet to declare Reserves.

The broker notes the company is expensive based on current Resources comparison but has produced LCE and completed customer qualification. Petra also expects the company to more than double Resources in the June half. 

Buy rating. Target price is 53c.

This report was published on April 7, 2022.

Target price is $0.53 Current Price is $0.48 Difference: $0.05
If AGY meets the Petra Capital target it will return approximately 10% (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 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 80.00.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 120.00.

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

AHX    APIAM ANIMAL HEALTH LIMITED

Healthcare services - Overnight Price: $0.80

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

Shaw and Partners conducts a healthcare sector overview and expects the sector will materially outperform over the medium term.

The broker points to a 50m backlog in doctor visits and expects increased spending post covid will drive an imminent margin expansion of roughly 200 basis points. 

Shaw and Partners expects GP visits will recover to pre-covid levels by May/June 2022 and expects the backlog will take two years to clear. 

Add to that the fact that Australia's population is both growing and ageing, the broker predicts both State and Federal governments will need to increase medical spending (the Victorian government has already announced $1.5bn to ease the elective surgery backlog and the Feds have allocated an extra $220m over four years to the MBS).

The broker expects the companion-animal health industry will enjoy a similar covid recovery and notes Apiam Animal Health delivers exposure to both companion-animal and wholesale animal markets. Agricultural tailwinds are also starting to emerge as Australia exits drought, lifting water entitlements and herds, and increasing grain and cattle volumes.

Shaw says Apiam has accelerated its organic and inorganic growth target and plans to double them by FY24, noting this provides the longest term guidance and ambitions ever provided in the company history.

Buy rating. Target price rises to $1.26 from $1.23.

This report was published on April 11, 2022.

Target price is $1.26 Current Price is $0.80 Difference: $0.46
If AHX meets the Shaw and Partners target it will return approximately 57% (excluding dividends, fees and charges).

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


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