Australian Broker Call *Extra* Edition – Jul 25, 2022

Daily Market Reports | Jul 25 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)

AKE   ALK   BPT   DOC   EVS   GDG   HMY   HUB   JBH   KMD   MAP   NSR   PDL (2)   PDN   PEB   PFP   PLT   RUL   SUN  

PFP    PROPEL FUNERAL PARTNERS LIMITED

Consumer Products & Services - Overnight Price: $4.71

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

Bell Potter updates the coverage of Propel Funeral Partners with a change of analyst.

The broker views Propel Funeral Partners as well placed to consolidate the very fragmented funeral market with strong management and some $149m in available debt facilities.

Bell Potter's analysis sees the company as the second largest operator in A&NZ and estimates the company can grow market share to around 12% by FY25.

The stock trades at a premium rating which the broker believes is justified in light of the current operations, M&A potential and the solid historical performance.

Accordingly the stock is awarded a Buy rating. The price target is $5.40.

This report was published on July 21, 2022.

Target price is $5.40 Current Price is $4.71 Difference: $0.69
If PFP meets the Bell Potter target it will return approximately 15% (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 11.90 cents and EPS of 14.20 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.17.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 12.60 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 2.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.81.

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

PLT    PLENTI GROUP LIMITED

Business & Consumer Credit - Overnight Price: $0.64

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

Plenti Group's Q1 market update has triggered lower forecasts at Wilsons. Overweight rating has been retained in combination with a $1.40 price target (was $1.60).

Other than loan originations, which were negative quarter-on-quarter, Wilsons found all other key operational metrics surprised to the upside.

The broker argues management at the lender and customers are preparing for higher interest rates. Also: no forward guidance has been provided.

Apart from anticipated larger losses in the short term, Wilsons has also pushed out achieving profitability to FY25, instead of FY24 as was projected previously.

This report was published on July 21, 2022.

Target price is $1.40 Current Price is $0.64 Difference: $0.76
If PLT meets the Wilsons target it will return approximately 119% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 4.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.22.

Forecast for FY24:

Wilsons forecasts a full year FY24 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 35.56.

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

RUL    RPMGLOBAL HOLDINGS LIMITED

Mining Sector Contracting - Overnight Price: $1.52

Moelis rates ((RUL)) as Initiation of coverage with Buy (1) -

Moelis has initiated coverage of RPMGlobal with a maiden Buy rating accompanied by a $1.94 price target.

The broker views the company as a well-established provider of services to mining companies with a Tier-1 customer base, profitable operations, well-capitalised and with a strong organic growth profile.

Moelis highlights there is a growing ESG focus at the company, including via new emissions software applications. Revenue growth is projected into double-digit percentages for at least the four years ahead.

Revenues were stagnant before taking a dive in FY21 but the broker explains RPMGlobal was going through a transition period during which upfront payments have been replaced with subscription sales and the sale of the Geogas division.

RPMGlobal should be profitable in FY23 on current projections.

This report was published on July 21, 2022.

Target price is $1.94 Current Price is $1.52 Difference: $0.42
If RUL meets the Moelis target it will return approximately 28% (excluding dividends, fees and charges).
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 0.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 542.86.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.26 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 120.63.

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

SUN    SUNCORP GROUP LIMITED

Insurance - Overnight Price: $11.01

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

Jarden reviews the earnings forecasts for Suncorp Group post the sale of the bank operations.

The broker's earnings estimates are revised down for FY24 by -6.7% to reflect the sale and the anticipated changes in capital management, including a special $400m dividend.

The divestment is viewed as strategically sensible by the analyst, however the valuation for the remaining insurance business is now calculated to be on par with competitor Insurance Australia Group ((IAG)) for FY24.

Jarden highlights the attractive valuations for the general insurance sector and rates IAG ahead of Suncorp Group, but QBE Insurance ((QBE)) is the top pick.

The price target remains at $13.10 and an Overweight rating is maintained.

This report was published on July 21, 2022.

Target price is $13.10 Current Price is $11.01 Difference: $2.09
If SUN meets the Jarden target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $13.17, suggesting upside of 19.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 44.00 cents and EPS of 52.60 cents.
At the last closing share price the estimated dividend yield is 4.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.4, implying annual growth of -34.0%.
Current consensus DPS estimate is 42.2, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 20.6.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 95.70 cents and EPS of 92.50 cents.
At the last closing share price the estimated dividend yield is 8.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 90.1, implying annual growth of 68.7%.
Current consensus DPS estimate is 70.8, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 12.2.

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


Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.


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