Australian Broker Call *Extra* Edition – Aug 11, 2022

Daily Market Reports | Aug 11 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)

ADT   ALU   APX   ASX   AZJ   BHP   CAR   CIP   CRN (2)   CTM   DHG   DUB   DVP   DXC   IAG   MP1   MYX (2)   NAB   NHF   NIC   NWS   OZL   PEX   RDY (2)   REA   SDF   SFR (2)   SUN   SZL   WAF   WTC   XRO   ZIP  

DXC    DEXUS CONVENIENCE RETAIL REIT

REITs - Overnight Price: $3.02

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

Moelis assesses the FY22 result for Dexus Convenience Retail REIT, which came in-line with guidance but marked a downgrade in the company's outlook earnings for FY23 from higher interest rates.

Dexus Convenience Retail REIT sold 4 assets over the second half at a 4% premium to the book value, however, the analyst notes there is some weakness in pricing emerging with slowing volumes. 

The NTA rose 5% to $4.03, gearing levels of 32% remain in the target range and the borrowings are 59% hedged across FY23 and FY24.

Moelis' earnings forecasts are lowered by -4.2% and -4.6% for FY23 and FY24, respectively.

Buy rating retained. Target price is lowered to $3.83 from $3.90.

This report was published on August 8, 2022.

Target price is $3.83 Current Price is $3.02 Difference: $0.81
If DXC meets the Moelis target it will return approximately 27% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 22.20 cents and EPS of 22.40 cents.
At the last closing share price the estimated dividend yield is 7.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.48.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 22.70 cents and EPS of 22.90 cents.
At the last closing share price the estimated dividend yield is 7.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.19.

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

IAG    INSURANCE AUSTRALIA GROUP LIMITED

Insurance - Overnight Price: $4.59

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

Jarden expects softer results for General Insurers (GI) in the reporting season due to large investment mark-to-market losses compounding elevated CAT costs, particularly for domestic GI's.

Insurance Australia Group has pre-announced headline FY22 metrics and the broker expects the focus will be on the drivers for underlying margins and claims inflation/reserving. The target rises to $5.40 from $5.35. Buy.

This report was published on August 5, 2022.

Target price is $5.40 Current Price is $4.59 Difference: $0.81
If IAG meets the Jarden target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.88, suggesting upside of 5.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 11.00 cents and EPS of 8.30 cents.
At the last closing share price the estimated dividend yield is 2.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 55.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.9, implying annual growth of N/A.
Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 39.1.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 28.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 6.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.1, implying annual growth of 152.9%.
Current consensus DPS estimate is 24.4, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 15.4.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MP1    MEGAPORT LIMITED

Cloud services - Overnight Price: $8.56

Goldman Sachs rates ((MP1)) as Buy (1) -

Megaport's FY22 result appears to have satisfied Goldman Sachs, thanks to a strong earnings (EBITDA) trajectory.

The company's July restructure and reduced headcount also augurs well for FY23 costs, says the broker.

Contracts and PartnerVantage numbers have risen sharply and the broker expects conversions will rise over time.

Buy rating retained. Target price rises to $10.30 from $9.60.

This report was published on August 9, 2022.

Target price is $10.30 Current Price is $8.56 Difference: $1.74
If MP1 meets the Goldman Sachs target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $11.16, suggesting upside of 22.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 71.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -15.1, 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 FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 285.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -1.1, 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.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

MYX    MAYNE PHARMA GROUP LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $0.36

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

Mayne Pharma has received Federal Drug Administration approval for its generic Nuvaring product, which will be marketed as Haloette - fourth time lucky.

But Canaccord Genuity says the protracted approval has come too late for the company to meet initial forecasts given competitors received earlier approval, reducing the size of the prospect.

The broker also notes that investor attention has shifted to Nexstellis, which has IP protection, marketing exclusivity and the opportunity to divest the contract services business, easing balance-sheet pressure.

Buy rating and 55c target price retained.

This report was published on August 8, 2022.

Target price is $0.55 Current Price is $0.36 Difference: $0.19
If MYX meets the Canaccord Genuity target it will return approximately 53% (excluding dividends, fees and charges).

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


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

Final approval by the FDA of Mayne Pharma's Nuvaring generic, Haloette, is positive, however, Wilsons views the FDA delays since 2018 as lowering the growth opportunities following the entry of other products into the market.

Wilsons considers the sales opportunity for Mayne Pharma as some US$10m and a 5-10% market share on an total addressable market of US$140-$150m.

The current earnings forecast has no contribution from Haloette in FY22.

The Overweight rating and $0.32 price target are retained.

This report was published on August 8, 2022.

Target price is $0.32 Current Price is $0.36 Difference: minus $0.04 (current price is over target).
If MYX meets the Wilsons target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.36.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 360.00.

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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