Australian Broker Call *Extra* Edition – Apr 14, 2022

Daily Market Reports | Apr 14 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   AKE   AMP   AWC   AX1   BHP (2)   BXB   CGF   CIA   CRN   CXO   DRR   EMN   FLT   FMG   GLN   IAG   IGO   ILU (2)   INA   INR   IRE   JBH   JRV   KED   KGN   LPI   LTR   MPL   NHC   NHF   OZL   PDL (2)   PDN   PLL   PLS   PPG (2)   PSC   QBE   RIO   S32   SFR   SLX   SUN   TPW   TRS   UBI   UNI   VUL   WES   WHC   WOW   WSA  

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $5.55

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

Aussie Broadband's acquisition of Over The Wire has completed, with Shaw and Partners noting the purchase looks to be $35m earnings accretive in FY23, and that the addition of Over The Wire's management to the Aussie Broadband team adds to the company's growth expertise.

Completion of the deal drives 18%, 38% and 42% increases to Shaw and Partners' earnings per share forecasts through to FY24. The broker sees potential for further acquisitions for Aussie Broadband, particularly within the business segment. 

The Buy rating is retained and the target price increases to $6.71 from $6.46.

This report was published on April 13, 2022.

Target price is $6.71 Current Price is $5.55 Difference: $1.16
If ABB meets the Shaw and Partners target it will return approximately 21% (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 7.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 70.25.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 2.20 cents and EPS of 21.40 cents.
At the last closing share price the estimated dividend yield is 0.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.93.

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

AKE    ALLKEM LIMITED

New Battery Elements - Overnight Price: $13.26

Canaccord Genuity rates ((AKE)) as Buy (1) -

Canaccord Genuity reviews the battery supply chain sector after Europe surpassed 20% penetration for electric vehicles (EV) in 2021, selling 2.2m compared with 8.3m combustion engine cars, suggesting a rapid escalation in EV sales pending supply chain issues.

The broker's modelling suggests a sharp kick-up in penetration in the four years after EV penetration when a country passes the 20% mark, building to a "tsunami". 

Norway has reached 86% EV penetration and Canaccord Genuity believes the focus is now shifting to Germany, UK, France, Italy and Spain (GUFIs), which account for 80% of all vehicles sold in Europe.

The European Battery Alliance announced its plan to invest E127bn in the battery supply chain at the end of 2021 and another E925m to battery research projects by 2027.

The broker reports the European Strategic Action Plan has been updated and is targeting 1 terrawatt of battery demand by 2030 and outlines domestic target for cell making (90%); domestic active materials (40%) and recycling (100%). Meanwhile punitive regulations on vehicle emission are expected to rise, which the broker expects will be sufficient to accelerate the shift.

Allkem is one of the broker's key picks in the lithium space given its leverage to the lithium price and its business model.

Buy rating retained. Target price was listed at $16 in the report but has since been updated to $18 on April 11.

This report was published on April 4, 2022.

Target price is $18.00 Current Price is $13.26 Difference: $4.74
If AKE meets the Canaccord Genuity target it will return approximately 36% (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.

Forecast for FY23:

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

Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AMP    AMP LIMITED

Insurance - Overnight Price: $1.05

Jarden rates ((AMP)) as Neutral (3) -

Jarden makes negative investment mark-to-market earnings revisions across its insurance and diversified financial equities coverage, due to geopolitical tensions and increased expectations for interest rate rises.

Weaker markets weighed on funds under administration (FUA) for the wealth managers, points out the analyst.

The broker believes the risk of an inflated consensus EPS offsets demerger value catalysts for AMP and retains a Neutral rating and $1.10 target price.

This report was published on April 13, 2022.

Target price is $1.10 Current Price is $1.05 Difference: $0.05
If AMP meets the Jarden target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.08, suggesting upside of 3.2%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of 7.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.5, implying annual growth of N/A.
Current consensus DPS estimate is 0.7, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 14.0.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 5.00 cents and EPS of 9.20 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.2, implying annual growth of 22.7%.
Current consensus DPS estimate is 2.8, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 11.4.

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

AWC    ALUMINA LIMITED

Aluminium, Bauxite & Alumina - Overnight Price: $1.90

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

Goldman Sachs upgrades 2022 EPS estimates for the mining sector by more than 10% to the top end of most company guidance based on strong spot commodities prices.

The broker warns that recent strong price movements will be partly offset by rising operating and capital expenditure given cost inflation.

The broker expects inflation will outpace most consensus estimates and suspects that while there may be some negative surprises, commodity-price strength will win the day.

Goldman Sachs commodities team forecasts a primary aluminium deficit of -2.2MT in 2022 but is less optimistic on alumina given swing supply and refinery restarts in China and new refining capacity in Indonesia. Goldman Sachs expects this will offset supply disruptions from Russian sanctions.

Alumina Ltd is rated Neutral on valuation. Target price eases to $2.10 from $2.20.

The broker cuts EPS forecasts -1% in FY22; -6% in FY23 and -2% in FY24 in response on higher alumina and aluminium costs and concerns that gas-price inflation in Europe may affect the San Ciprian refinery in Spain. The broker also spies cash flow headwinds.

This report was published on April 11, 2022.

Target price is $2.10 Current Price is $1.90 Difference: $0.2
If AWC meets the Goldman Sachs target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $2.23, suggesting upside of 16.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 14.89 cents and EPS of 16.37 cents.
At the last closing share price the estimated dividend yield is 7.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.6, implying annual growth of N/A.
Current consensus DPS estimate is 24.8, implying a prospective dividend yield of 12.9%.
Current consensus EPS estimate suggests the PER is 7.5.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 17.59 cents and EPS of 17.46 cents.
At the last closing share price the estimated dividend yield is 9.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.5, implying annual growth of -27.7%.
Current consensus DPS estimate is 17.9, implying a prospective dividend yield of 9.3%.
Current consensus EPS estimate suggests the PER is 10.4.

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


The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE

If you already had your free trial, why not join as a paying subscriber? CLICK HERE

MEMBER LOGIN