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

Daily Market Reports | Jun 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)

ALK   APC   AZJ   CWY   DUB   ELD   FSF   GNC (2)   HCW   HDN   IMM   JAN   MNY   PTM   PWH   SGM   STA   TLC   Z2U  

ALK    ALKANE RESOURCES LIMITED

Gold & Silver - Overnight Price: $0.96

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

Alkane Resources has announced an initial resource for its Boda deposit at the Northern Molong project. This is a very large gold and copper deposit containing 5.2m ounces of gold and 900,000t of copper at a cut-off grade of 0.3g/t gold equivalent.

Bell Potter believes this is a resource that has excellent potential to support a large economic mining operation, with the addition of a significant inventory of copper that should mean the business is a key beneficiary of the electrification of the global economy.

Accordingly, the target is raised to $1.30 from $1.15. Buy rating maintained.

This report was published on June 7, 2022.

Target price is $1.30 Current Price is $0.96 Difference: $0.34
If ALK meets the Bell Potter target it will return approximately 35% (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 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 5.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.84.

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

APC    AUSTRALIAN POTASH LIMITED

Agriculture - Overnight Price: $0.06

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

Australian Potash has updated on the brine flow at Lake Wells sulphate of potash project. Shaw & Partners concludes from the update that there will be lower initial as well as sustaining capital costs.

This is positive to valuation at realised prices of US$380/t. The broker believes the resource base in this project is higher quality compared to peers, and given the excellent commodity fundamentals and solid financials maintains a Buy rating and 21c target.

This report was published on June 8, 2022.

Target price is $0.21 Current Price is $0.06 Difference: $0.15
If APC meets the Shaw and Partners target it will return approximately 250% (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 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.00.

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

AZJ    AURIZON HOLDINGS LIMITED

Transportation & Logistics - Overnight Price: $4.20

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

Aurizon Holdings originally intended to complete the purchase of OneRail early in 2022 but the timeline has been extended following a delay in regulatory approvals. While envisaging only modest risks to completing the deal, Jarden awaits ACCC approval before integrating the purchase into forecasts.

The broker contemplates a OneRail Coal (east coast rail) trade sale scenario and its implications for the balance sheet and future capital returns, believing this could provide Aurizon Holdings with the ability to restore dividend appeal sooner.

Jarden retains a Neutral rating and $4.35 target.

This report was published on June 8, 2022.

Target price is $4.35 Current Price is $4.20 Difference: $0.15
If AZJ meets the Jarden target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $3.71, suggesting downside of -10.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 27.20 cents and EPS of 27.20 cents.
At the last closing share price the estimated dividend yield is 6.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of -29.1%.
Current consensus DPS estimate is 21.6, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 15.0.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 28.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.2, implying annual growth of 9.0%.
Current consensus DPS estimate is 23.3, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 13.8.

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

CWY    CLEANAWAY WASTE MANAGEMENT LIMITED

Industrial Sector Contractors & Engineers - Overnight Price: $2.89

Jarden rates ((CWY)) as Buy (1) -

Cleanaway Waste Management is on a course to achieve further strategic value and competitive advantage, Jarden asserts.

While there are a number of cost headwinds, the broker expects further announcements on optimisation and more effective use of data should support the underlying EBITDA margin.

Returns for waste-to-energy remain uncertain and expenditure will modestly affect free cash flow yet there is a negligible impact on gearing.

Jarden forecasts a three-year growth rate for earnings per share to FY25 of 21% and considers the 11.0x enterprise value/EBITDA for FY23 demonstrates value. Buy rating and $3.30 target retained.

This report was published on June 9, 2022.

Target price is $3.30 Current Price is $2.89 Difference: $0.41
If CWY meets the Jarden target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $3.12, suggesting upside of 11.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 4.60 cents and EPS of 7.10 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.1, implying annual growth of 0.6%.
Current consensus DPS estimate is 4.6, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 39.4.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 5.30 cents and EPS of 10.20 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.6, implying annual growth of 35.2%.
Current consensus DPS estimate is 5.8, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 29.2.

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

DUB    DUBBER CORPORATION LIMITED

Cloud services - Overnight Price: $0.78

Sequoia rates ((DUB)) as Downgrade to Hold from Buy (3) -

Dubber Corp has an improving base business with increasing penetration in telco and rising average revenue per unit as well as average revenue per telco.

Nevertheless, Sequoia is concerned about rapidly rising costs, which were significantly higher than forecast in the third quarter.

The third quarter report revealed revenue of $9.25m, up 40%, and $25.9m for the year to date, up 83% including acquisitions. Closing cash of $97m at the end of March, observed to be enough for 2.5 years at the current cash burn rate.

The broker downgrades to Hold from Buy and reduces the target to $1.05 from $4.50.

This report was published on May 31, 2022.

Target price is $1.05 Current Price is $0.78 Difference: $0.27
If DUB meets the Sequoia target it will return approximately 35% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Sequoia forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 17.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.36.

Forecast for FY23:

Sequoia forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 15.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.13.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


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