Australian Broker Call *Extra* Edition – May 20, 2022

Daily Market Reports | May 20 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)

APE (3)   CXL   ELD   GMA   NWS   PLT (2)   QUB   RDY   SUN  

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components - Overnight Price: $11.04

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

Eagers Automotive notes new vehicle demand continues to outpace supply, driving the company's order book up more than 25% since December.

Bell Potter notes an anticipated reduction in vehicles delivered to customers in the first half is driving an expected -12-15% profit decline on the previous comparable period.

The broker expects a similar result in the second half, anticipating supply constraints are unlikely to ease in the short-term.

The Buy rating is retained and the target price decreases to $15.50 from $17.25.

This report was published on May 19, 2022.

Target price is $15.50 Current Price is $11.04 Difference: $4.46
If APE meets the Bell Potter target it will return approximately 40% (excluding dividends, fees and charges).
Current consensus price target is $16.35, suggesting upside of 48.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 47.50 cents and EPS of 115.60 cents.
At the last closing share price the estimated dividend yield is 4.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 103.4, implying annual growth of -17.4%.
Current consensus DPS estimate is 63.9, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 10.7.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 47.50 cents and EPS of 91.60 cents.
At the last closing share price the estimated dividend yield is 4.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.9, implying annual growth of -5.3%.
Current consensus DPS estimate is 60.1, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 11.3.

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


Moelis rates ((APE)) as Buy (1) -

Eagers Automotive's tightened first-half guidance disappointed Moelis, as new-vehicle deliveries failed to materialise, but the broker notes demand for new vehicles remains strong and the company's pipeline is solid and conditions will remain supportive throughout 2022.

Most manufacturing nations are forecasting a rise in global output over the next year and Moelis says the company is well positioned to deliver a strong upward skew in the December half.

The broker also expects cost discipline, rationalisation of the dealer network and IT investment will deliver strong margin growth.

FY22-FY23 EPS forecasts are unchanged. Buy rating and $16.96 target price retained.

This report was published on May 18, 2022.

Target price is $16.96 Current Price is $11.04 Difference: $5.92
If APE meets the Moelis target it will return approximately 54% (excluding dividends, fees and charges).
Current consensus price target is $16.35, suggesting upside of 48.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 72.30 cents and EPS of 105.00 cents.
At the last closing share price the estimated dividend yield is 6.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 103.4, implying annual growth of -17.4%.
Current consensus DPS estimate is 63.9, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 10.7.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 70.60 cents and EPS of 103.20 cents.
At the last closing share price the estimated dividend yield is 6.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.9, implying annual growth of -5.3%.
Current consensus DPS estimate is 60.1, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 11.3.

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


Wilsons rates ((APE)) as Upgrade to Overweight from Market Weight (1) -

Eagers Automotive's AGM trading update proved a mixed bag, strong margins and new vehicle demand battling with supply constraints to delay earnings.

Wilsons takes the opportunity to cut EPS forecasts -8% in 2022 and -7% in 2024 to reflect higher depreciation and amortisation, and interest costs, and the broker notes recent peer results in North America point to softening used-vehicle demand and margins.

But given the new car order book is 25% above 2021 and demand for new vehicles remains buoyant, Wilsons upgrades to Overweight, appreciating Eager's management, strategy, second-half earnings skew and attractive valuation.

Target price inches up to $13.77 from $13.75.

This report was published on May 19, 2022.

Target price is $13.77 Current Price is $11.04 Difference: $2.73
If APE meets the Wilsons target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $16.35, suggesting upside of 48.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 70.70 cents and EPS of 104.10 cents.
At the last closing share price the estimated dividend yield is 6.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 103.4, implying annual growth of -17.4%.
Current consensus DPS estimate is 63.9, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 10.7.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 65.90 cents and EPS of 99.00 cents.
At the last closing share price the estimated dividend yield is 5.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.9, implying annual growth of -5.3%.
Current consensus DPS estimate is 60.1, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 11.3.

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

CXL    CALIX LIMITED

Mining Sector Contracting - Overnight Price: $7.47

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

Bell Potter notes two of Calix's development partners, Boral ((BLD)) and Pilbara Minerals ((PLS)), have been awarded a combined $50m in government grants for projects developing Calix's chlorofluorocarbon (CFC) technology for commercial use.

The broker anticipates the grant award for the Calix-Pilbara Minerals project could suggest an intention for the companies to progress to a joint venture partnership, and open Calix's technology to a new market.

With the company aiming to convert at least one of two Low Emissions Intensity Lime And Cement (LEILCA) memorandums of understanding to license agreements before the end of the financial year, the broker anticipates another project announcement ahead.

The Buy rating is retained and the target price increases to $9.21 from $7.85.

This report was published on May 19, 2022.

Target price is $9.21 Current Price is $7.47 Difference: $1.74
If CXL meets the Bell Potter target it will return approximately 23% (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 6.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 111.49.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 933.75.

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


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