Australian Broker Call *Extra* Edition – Jul 13, 2022

Daily Market Reports | Jul 13 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)

A2M   ABY   AX1   BLX   BML   BRG   BWX   CGC   CRN   EDV   EM2   GQG   JBH   MFG   MP1   NCK   OZL   PMV   SDR   SUL   WES   WHC   WOW   WTC   XRO  

BLX    BEACON LIGHTING GROUP LIMITED

Furniture & Renovation - Overnight Price: $1.90

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

While risks are becoming more balanced, Jarden lowers forecasts for stocks under its coverage in the Discretionary Retail sector to reflect a weaker outlook.

The broker lifts its cost-of-doing-business forecasts across its coverage, which lowers its EPS forecasts for FY23 and FY24 by -3-4% for household goods and -15-19% for fashion/recreation.

The analyst lifts the FY22 EPS forecast for Beacon Lighting by around 6.2%, to reflect stronger revenue forecasts for Australia and International channels. Gross margins are expected to be flat. A target price of $2.00 is set. Overweight.

This report was published on July 7, 2022.

Target price is $2.00 Current Price is $1.90 Difference: $0.1
If BLX meets the Jarden target it will return approximately 5% (excluding dividends, fees and charges).

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

BML    BOAB METALS LIMITED

Mining - Overnight Price: $0.18

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

Shaw and Partners is expecting a Definitive Feasibility Study for Boab Metals' Sorby-Hills project to be delivered in the second half  of 2022, noting the study is expected to outline a materially larger project than described in the 2020 Pre-Feasibility Study given increases to resource size and quality. 

The broker notes Boab Metals has taken key steps in the last quarter to allow site preparation to commence ahead of the wet season, including receiving an amendment to the EPA approval to allow early works to commence. 

The Buy rating and target price of $1.00 are retained.

This report was published on July 12, 2022.

Target price is $1.00 Current Price is $0.18 Difference: $0.82
If BML meets the Shaw and Partners target it will return approximately 456% (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 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.20.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.00.

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

BRG    BREVILLE GROUP LIMITED

Household & Personal Products - Overnight Price: $19.11

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

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs re-initiates with a Buy rating on Breville Group with strong secular growth opportunities in the Roast & Ground coffee market, new entry into Mexico, France, Portugal, Italy and South Korea and ongoing investment in digital platforms.

The broker forecasts a CAGR earnings of 14.9% for FY22-FY24. A Buy rating. The price target is $23.40.

This report was published on July 10, 2022.

Target price is $23.40 Current Price is $19.11 Difference: $4.29
If BRG meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $26.12, suggesting upside of 33.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 27.00 cents and EPS of 77.00 cents.
At the last closing share price the estimated dividend yield is 1.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 76.2, implying annual growth of 15.9%.
Current consensus DPS estimate is 30.0, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 25.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 36.00 cents and EPS of 90.00 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 83.9, implying annual growth of 10.1%.
Current consensus DPS estimate is 33.9, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 23.3.

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

BWX    BWX LIMITED

Household & Personal Products - Overnight Price: $0.73

Moelis rates ((BWX)) as Hold (3) -

Following a significant guidance downgrade to FY22 earnings by BWX, which subsequently triggered a $23.2m capital raise, Moelis lowers its target price to $0.87 from $1.59.

The downgrade was largely due to a halt in normal channel stuffing practices at the end of June, which the broker considers to be sensible. Management also provided FY23 guidance for underlying revenue of $260-270m and earnings (EBITDA) of $45-49m.

The analyst retains a Hold rating after downgrading FY22-24 EPS estimates by more than -50% to incorporate substantially lower revenue, dilution from the capital raise and higher than expected depreciation costs from the transition to a new distribution centre.

This report was published on July 10, 2022.

Target price is $0.87 Current Price is $0.73 Difference: $0.14
If BWX meets the Moelis target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $0.88, suggesting upside of 16.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 5.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -4.2, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of 3.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.2, implying annual growth of N/A.
Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 9.3.

Market Sentiment: 0.3
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