Australian Broker Call *Extra* Edition – Sep 06, 2022

Daily Market Reports | Sep 06 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)

29M   A1M   ABB   AIS   AT1   BGA (2)   BIO   BRI   CBO   CGC (4)   CLG   CQR   CUP   CYG (2)   DTC   ESK   HLO   IFM   IGO   INA   JLG   KAR   LDX   LRK   LYC (2)   MAQ (2)   MDR   MTO   MVF   MVP   MYX (2)   NST   NXT   OZL   PDN   PNV   PPE (2)   PPT (2)   PTM   PWR (2)   PXA   QAN   RHC (3)   RRL   S32   SES   SLC   UNI (2)   WES   WPR  

29M    29METALS LIMITED

Copper - Overnight Price: $1.84

Canaccord Genuity rates ((29M)) as Downgrade to Hold from Buy (3) -

29Metals has delivered first half earnings of $94m, a sizeable beat to Canaccord Genuity's forecast $73m which the broker attributed to lower costs than it had assumed.

The broker was also surprised by the announcement of a dividend, with the company paying out 2 cents per share. 

With a $26m stamp duty payment to be made, in the September quarter on Canaccord Genuity's expectations, and the capital expenditure requirements for the company's Cervantes project, Canaccord Genuity expects 29Metals to finish the next year in a -$5m net debt position.

The rating is downgraded to Hold from Speculative Buy and the target price increases to $1.90 from $1.80.

This report was published on August 30, 2022.

Target price is $1.90 Current Price is $1.84 Difference: $0.06
If 29M meets the Canaccord Genuity target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $2.03, suggesting upside of 10.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 2.00 cents and EPS of minus 1.00 cents.
At the last closing share price the estimated dividend yield is 1.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 184.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, implying annual growth of N/A.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 2.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 1.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.5, implying annual growth of N/A.
Current consensus DPS estimate is 3.0, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 21.6.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

A1M    AIC MINES LIMITED

Gold & Silver - Overnight Price: $0.49

Shaw and Partners rates ((A1M)) as Buy (1) -

AIC Mines's FY22 Annual Report advises the company is transitioning to a June 30 reporting cycle from a December 31 cycle.

At first glance, the company's June-half result appears to have pleased Shaw and Partners, the company posting strong quarter-on-quarter operational performance and revealing strong mine utilisation upside. 

The broker appreciates the growing cash flow (now positive) from Eloise, and says it is a long way from reaching its full potential.

Combined with a recent reserve and resource upgrade, the broker expects the company will be able to increase mine life to more than five years.

The broker is yet to update its model and retains its Buy rating and 73c target price for now.

This report was published on August 29, 2022.

Target price is $0.73 Current Price is $0.49 Difference: $0.24
If A1M meets the Shaw and Partners target it will return approximately 49% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 7.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.28.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 4.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.40.

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

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $2.56

JP Morgan rates ((ABB)) as Overweight (1) -

Following FY22 results, JP Morgan feels the market placed more emphasis on Aussie Broadband's lower FY23 expectations than the strong growth target for FY25. The company remains one of the cheapest stocks under the broker's coverage.

Despite a positive growth trajectory, the analyst notes the company now trades at mature Telco multiples.

While the target price falls to $5.65 from $6.10 on a more conservative view of growth, JP Morgan maintains its Overweight rating.

This report was published on August 30, 2022.

Target price is $5.65 Current Price is $2.56 Difference: $3.09
If ABB meets the JP Morgan target it will return approximately 121% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 0.00 cents and EPS of 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.60.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 0.00 cents and EPS of 21.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.19.

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

AIS    AERIS RESOURCES LIMITED

Industrial Metals - Overnight Price: $0.41

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

Aeris Resources' FY22 result pretty much met Bell Potter's revenue forecasts but fell well short of the broker's earnings (EBITDA) and net profit after tax forecasts and no dividend was declared (the broker was expecting a 0.8c dividend)

EPS of 12.4c compared with the broker's expected 53.8c a share, due to an exploration impairment and a miss on depreciation and amortisation, on top of sharply higher finance, transaction and administration costs. 

The company's cash position improved roughly 40% and no bank debt was drawn and Bell Potter believes the company has sufficient funds to meet its growth milestones.

Production guidance met the broker's forecasts but sustaining capital and operating cost guidance was sharply higher.

Earnings forecasts fall -87% in FY23; -36% in FY24 and -19% in FY25 and no dividend is forecast for the period.

But Bell Potter retains the faith and its Buy rating, noting the company offers good leveraged exposure to zinc and copper prices.

Target price falls to 93c a share from $1.33 a share to reflect margin compression and continued investment in production expansion.

This report was published on August 26, 2022.

Target price is $0.93 Current Price is $0.41 Difference: $0.52
If AIS meets the Bell Potter target it will return approximately 127% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.77.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.56.

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


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