Australian Broker Call *Extra* Edition – May 09, 2022

Daily Market Reports | May 09 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)

ABY   AD8 (2)   ALC   ALL   AT1   AX1   B4P   BET   CLU   COF   COH   CRN   CUV   FCL (2)   FMG   GOR   GOZ   IPD   JIN   KED   NCM   NST   NWS   NXS   OPY   PBH   PDN   PLL   QML   REA   RMS (2)   RRL   SES   SGR   SLA   SLH   TAH   TSI   WPR   WSP   Z2U  

ABY    ADORE BEAUTY GROUP LIMITED

Household & Personal Products - Overnight Price: $1.45

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

Adore Beauty was able to provide Q3 results slightly above Shaw and Partners expectations, despite elevated numbers a year earlier and significant reinvestment into new channels.

The broker noted increased cost inflation from supply chain disruptions remains a headwind and the longer-term growth outlook appears to be softening compared to the last 3 years.

The stock is seen trading at a -22% discount to listed pure online peers, based on estimates. There are no changes to forecasts, risk rating or price target. 

A Buy rating is maintained. Target $3.50.

This report was published on April 29, 2022.

Target price is $3.50 Current Price is $1.45 Difference: $2.05
If ABY meets the Shaw and Partners target it will return approximately 141% (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 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 46.77.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 5.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.58.

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

AD8    AUDINATE GROUP LIMITED

Hardware & Equipment - Overnight Price: $5.63

Canaccord Genuity rates ((AD8)) as Buy (1) -

Audinate Group's Q3 FY22 trading update showed revenues were tracking ahead of Canaccord Genuity's forecasts and the impact of chip shortages were not impacting as much as expected.

The broker thinks the market will continue to focus on the supply-chain/chip availability as a constraint on growth. Audinate Group's order backlog remains at record levels, estimated as in excess of US$25m, which is expected to be cleared in Q4 FY22/FY23.

Management noted the Chinese lockdowns are a key risk for manufacturing production, particularly in the first half of FY23.

Canaccord Genuity has increased revenue and earnings forecasts. The price target was reduced to $8.00 from $9.00 as a higher discount rate has been applied to the valuation model.

A Buy rating is maintained.

This report was published on April 28, 2022.

Target price is $8.00 Current Price is $5.63 Difference: $2.37
If AD8 meets the Canaccord Genuity target it will return approximately 42% (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 and EPS of minus 0.09 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6255.56.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.07 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8042.86.

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


Shaw and Partners rates ((AD8)) as Buy (1) -

Audinate Group's Q3 FY22 trading update was "rather surprisingly" positive according to Shaw and Partners.

Chip shortages peaked in January and February, with supply bouncing back in March, resulting in strong trading conditions in April.

Gross margin has been maintained and the chip inventory is now positive.

Shaw and Partners noted the improved ability for Audinate Group to be able to fulfill orders due to the rising supply of chips is being offset by manufacturing risks in China with covid lockdowns.

The broker's forecasts remain unchanged and the stock is rated a Buy; one to own for the long-term, suggests Shaw. Target $11.75.

This report was published on April 29, 2022.

Target price is $11.75 Current Price is $5.63 Difference: $6.12
If AD8 meets the Shaw and Partners target it will return approximately 109% (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 minus 4.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 137.32.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 225.20.

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

ALC    ALCIDION GROUP LIMITED

Healthcare services - Overnight Price: $0.16

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

Alcidion Group's Q3 FY22 trading report was in-line with Canaccord Genuity's expectations, booking revenues and cash burn in-line with forecasts.

The company is benefiting from unique tailwinds from the significant need for digitising patient records in UK hospitals, with about 30% of NHS trusts still using paper and pencil systems, the broker noted.

Alcidion Group's management and Canaccord Genuity are both confident the full year result will meet expectations. The company also continues to guide to underlying normalised earnings and cashflow breakeven for FY22.

A Buy rate is maintained and forecasts are unchanged. Target 32c.

This report was published on April 27, 2022.

Target price is $0.32 Current Price is $0.16 Difference: $0.16
If ALC meets the Canaccord Genuity target it will return approximately 100% (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 and EPS of 0.00 cents.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.33.

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

ALL    ARISTOCRAT LEISURE LIMITED

Gaming - Overnight Price: $32.14

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

Goldman Sachs reinstates coverage of Aristocrat Leisure with a $43 target and Buy rating. It's felt the business is positioned for longer-term structural growth, and medium term tailwinds should arise from ongoing design and development (D&D) investment.

Data also suggest to the broker the gaming environment is recovering quickly in the US beyond FY19 levels. In addition, due to a strong balance sheet, there's considered to be scope for either near-term capital management or M&A activity.

So far the diversification from land base to digital through a series of acquisitions has yielded benefits, with the analyst noting the strong performance of Pixel over the past two years.

This report was published on April 28, 2022.

Target price is $43.00 Current Price is $32.14 Difference: $10.86
If ALL meets the Goldman Sachs target it will return approximately 34% (excluding dividends, fees and charges).
Current consensus price target is $46.58, suggesting upside of 44.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 66.00 cents and EPS of 163.00 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 153.5, implying annual growth of 19.8%.
Current consensus DPS estimate is 58.8, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 73.00 cents and EPS of 183.00 cents.
At the last closing share price the estimated dividend yield is 2.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 177.2, implying annual growth of 15.4%.
Current consensus DPS estimate is 70.2, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 18.1.

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

AT1    ATOMO DIAGNOSTICS LIMITED

Medical Equipment & Devices - Overnight Price: $0.11

Canaccord Genuity rates ((AT1)) as Speculative Buy (1) -

Canaccord Genuity noted Atomo Diagnostics' Q3 FY22 revenue/receipts/OCF were better than expected with this quarters RAT sales outstripping the first half of FY22. This was the primary driver of the result.

The HIV result reflected the grind in the global procurement system but a better performance is expected going forward noted the broker.

To meet market expectations Atomo Diagnostics will need new revenue streams, better performance for the HIV business as well as FDA approval for FebriDX to fulfill the shortfall in RAT sales in FY23, says Canaccord Genuity.

A Speculative Buy rate is maintained with the broker concluding the market needs to see more from the company before the shares are re-rated. Target 25c.

This report was published on April 27, 2022.

Target price is $0.25 Current Price is $0.11 Difference: $0.14
If AT1 meets the Canaccord Genuity target it will return approximately 127% (excluding dividends, fees and charges).

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

AX1    ACCENT GROUP LIMITED

Apparel & Footwear - Overnight Price: $1.31

Wilsons rates ((AX1)) as Overweight (1) -

Accent Group's trading update suggested sales have improved but remain subdued since the first eight weeks of the second half FY22 according to Wilsons. 

Management confirmed Accent Group's gross margins improved over last year and the broker expects lower second half revenue to be offset by higher gross margins.

Wilsons is encouraged by the transition of PIVOT stores into proven, higher gross margin retail banners, with the strategy showing a clear focus on the youth apparel market to increase market shares and margin expansion.

The company did not provide any guidance and the broker's earnings forecasts were raised slightly +0.5% in FY22 and +0.1% FY23.

The stock is Overweight rated. Target $2.20.

This report was published on April 29, 2022.

Target price is $2.20 Current Price is $1.31 Difference: $0.89
If AX1 meets the Wilsons target it will return approximately 68% (excluding dividends, fees and charges).
Current consensus price target is $2.23, suggesting upside of 70.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 6.30 cents and EPS of 7.50 cents.
At the last closing share price the estimated dividend yield is 4.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.4, implying annual growth of -33.8%.
Current consensus DPS estimate is 8.4, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 10.70 cents and EPS of 12.80 cents.
At the last closing share price the estimated dividend yield is 8.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.7, implying annual growth of 56.4%.
Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 9.4%.
Current consensus EPS estimate suggests the PER is 8.9.

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


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