Australian Broker Call *Extra* Edition – Apr 22, 2022

Daily Market Reports | Apr 22 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)

ALX   BGA   COE (2)   CRN   CYG   DGL   ERD   EVS   HPG   HUB (2)   PPS   RHC   RIO (2)   SLA   SMP   STO   WHC (2)  

SLA    SILK LASER AUSTRALIA LIMITED

Healthcare services - Overnight Price: $2.75

Wilsons rates ((SLA)) as Overweight (1) -

Wilsons finds Silk Laser Australia's more than -20% share price decline in the last three months to be unjustified. The broker notes Silk Laser Australia has been tied to declines from retail discretionary peers, but notes the company is less discretionary than the market is assuming.

The broker notes more than fifteen years of data from the US shows Botox and filler treatments are largely insulated from recessions, with the income bracket of core customers for these treatments less likely to be impacted in a recessionary environment.

Wilsons has moderated its expected growth to account for persisting softness in West and South Australia in the second half.

The Overweight rating and target price of $5.25 are retained.

This report was published on April 21, 2022.

Target price is $5.25 Current Price is $2.75 Difference: $2.5
If SLA meets the Wilsons target it will return approximately 91% (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 15.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.63.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 23.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.85.

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

SMP    SMARTPAY HOLDINGS LIMITED

Business & Consumer Credit - Overnight Price: $0.68

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

Smartpay's March-quarter results beat Shaw and Partners' forecasts on most metrics.

Australian acquiring transactional revenue outpacing by 9%, despite omicron and floods gross margins remained strong. The company reported record customer growth.

The broker's prognosis is positive, expecting the structural jaws between cash and digital payments will continue to support growth.

EPS forecasts rise 2.6% in FY22, 2% in FY23 and 1.6% in FY24.

Buy rating and $1.20 target price retained.

This report was published on April 21, 2022.

Target price is $1.20 Current Price is $0.68 Difference: $0.52
If SMP meets the Shaw and Partners target it will return approximately 76% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 240.28.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.09.

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

STO    SANTOS LIMITED

NatGas - Overnight Price: $8.37

Jarden rates ((STO)) as Overweight (2) -

Santos has announced a US$250m on-market buyback and a new, more complex dividend policy, possibly in response to investors switching into Woodside Petroleum ((WPL)) after the company issued disappointing 2022 guidance, speculates Jarden.

Jarden says the new dividend policy targets better returns to shareholders, and should bring the share price into line with outperforming Woodside.

The broker nearly doubles its 2023 dividend forecast - equating to a 4.9% yield. Jarden also expects Woodside will be likely to consider capital management post the BHP ((BHP)) Petroleum merger.

The buyback surprised Jarden, given the share price is trading at a two-year high and gearing is only slightly above target, but the broker expects this might also help remedy recent share-price underperformance.

Overweight rating retained. Target price is steady at $8.55.

This report was published on April 20, 2022.

Target price is $8.55 Current Price is $8.37 Difference: $0.18
If STO meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $9.74, suggesting upside of 16.4%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 30.88 cents and EPS of 98.33 cents.
At the last closing share price the estimated dividend yield is 3.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.8, implying annual growth of N/A.
Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 7.9.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 39.96 cents and EPS of 66.78 cents.
At the last closing share price the estimated dividend yield is 4.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.1, implying annual growth of -20.5%.
Current consensus DPS estimate is 24.3, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 10.0.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

WHC    WHITEHAVEN COAL LIMITED

Coal - Overnight Price: $4.80

Bell Potter rates ((WHC)) as Buy (1) -

Whitehaven Coal's March-quarter production report missed Bell Potter's forecasts but still represented a strong rebound on the prior quarter.

Management reiterates FY22 guidance and the broker notes the company's product quality and pricing have improved sharply.

The company's balance sheet staged a turnaround, moving to a net cash position of $161m, compared with net debt of $403m at the end of December, thanks to current record coal prices.

The broker marks to market coal prices and upgrades forecasts for thermal coal. EPS forecasts rise 87% in FY22; 87% in FY23 and 267% in FY24.

Target price rises to $4.40 from $3.60. Buy rating retained.

This report was published on April 20, 2022.

Target price is $4.40 Current Price is $4.80 Difference: minus $0.4 (current price is over target).
If WHC meets the Bell Potter target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.47, suggesting upside of 13.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 69.00 cents and EPS of 139.30 cents.
At the last closing share price the estimated dividend yield is 14.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 138.7, implying annual growth of N/A.
Current consensus DPS estimate is 39.4, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 3.5.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 87.00 cents and EPS of 122.80 cents.
At the last closing share price the estimated dividend yield is 18.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 119.3, implying annual growth of -14.0%.
Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 8.4%.
Current consensus EPS estimate suggests the PER is 4.0.

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


Goldman Sachs rates ((WHC)) as Buy (1) -

Whitehaven Coal's March-quarter result pleased Goldman Sachs, production rising despite weather and labour challenges. Management reiterated guidance.

The company held $161m in cash at the end of the March quarter, compared to $403m of net debt at the end of December, and after the buyback, highlighting strong free cash flow.

The broker expects the company will hit a record $1bn in net cash by the end of June, allowing it to pay a 50c final dividend. 

EPS forecasts slip -1% in FY22, FY23 and FY24. Target price eases to $5.20 from $5.30.

Buy rating retained, the broker believing the company represents a compelling free-cash-flow, capital returns and degearing proposition.

This report was published on April 20, 2022.

Target price is $5.20 Current Price is $4.80 Difference: $0.4
If WHC meets the Goldman Sachs target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $5.47, suggesting upside of 13.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 58.00 cents and EPS of 158.00 cents.
At the last closing share price the estimated dividend yield is 12.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 138.7, implying annual growth of N/A.
Current consensus DPS estimate is 39.4, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 3.5.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 52.00 cents and EPS of 107.00 cents.
At the last closing share price the estimated dividend yield is 10.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 119.3, implying annual growth of -14.0%.
Current consensus DPS estimate is 40.2, implying a prospective dividend yield of 8.4%.
Current consensus EPS estimate suggests the PER is 4.0.

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


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