Australian Broker Call *Extra* Edition – Sep 16, 2022

Daily Market Reports | Sep 16 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)

ABP   AIM   AOF   ARF (2)   ASX   BKW   BWP   CGS   CHC   CIP   CLW   CNI (2)   COF   CQE (2)   CQR   DEG   DGL   DSK   DXS   ELD   GDC   GMG (2)   GPT (2)   HCW   HDN (2)   HMC   HPI   INA   JHX   LIC   LME   MCR   MGR   MTS (2)   NCZ   NSR (2)   NTD   PLY   PMV   PPG   QAL   RIO   SCG (2)   SCP (2)   SGP (2)   SLX   STA   UMG   VCX (2)   WPR   XRO (2)  

ABP    ABACUS PROPERTY GROUP

REITs - Overnight Price: $2.64

Jarden rates ((ABP)) as Upgrade to Buy from Overweight (1) -

In a review of the Australian REIT sector following the August reporting season, Jarden sees valuations becoming more attractive following significant year-to-date underperformance versus the broader Australian market.

The broker notes yields are well above those for direct property, and the spread over real bond yields is 80-90bps wider than the long-term average. REITs that have been able to reset interest expenses early and those with stronger top-line momentum are preferred.

The analyst feels underperformance of Abacus Property creates a cheaper way to get exposure to storage, even if core commercial exposure is included. The rating is upgraded to Buy from Overweight and the $3.20 target is unchanged.

National Storage, rated Overweight by Jarden, is the only pure play exposure to storage, though Abacus Property is preferred.

This report was published on September 2, 2022.

Target price is $3.20 Current Price is $2.64 Difference: $0.56
If ABP meets the Jarden target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $3.25, suggesting upside of 23.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 18.40 cents and EPS of 19.40 cents.
At the last closing share price the estimated dividend yield is 6.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.1, implying annual growth of -70.4%.
Current consensus DPS estimate is 18.3, implying a prospective dividend yield of 7.0%.
Current consensus EPS estimate suggests the PER is 14.5.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 18.80 cents and EPS of 19.80 cents.
At the last closing share price the estimated dividend yield is 7.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.6, implying annual growth of -2.8%.
Current consensus DPS estimate is 18.2, implying a prospective dividend yield of 6.9%.
Current consensus EPS estimate suggests the PER is 14.9.

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

AIM    AI-MEDIA TECHNOLOGIES LIMITED

Commercial Services & Supplies - Overnight Price: $0.30

CCZ Equities rates ((AIM)) as Buy (1) -

Total FY22 revenue was in line with the bottom end of Ai-Media Technologies guidance range, and underlying earnings (EBITDA) were also in line with guidance for “positive EBITDA”, notes CCZ Equities.

The shift to higher gross margin products is progressing, according to the analyst, and profit margins are expected to widen. This is expected to generate free cash flow at a 151% compound annual growth rate (CAGR) out to FY27.

The broker sets a $0.81 target price and maintains a Buy rating.

This report was published on September 2, 2022.

Target price is $0.81 Current Price is $0.30 Difference: $0.51
If AIM meets the CCZ Equities target it will return approximately 170% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

CCZ Equities forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 100.00.

Forecast for FY24:

CCZ Equities forecasts a full year FY24 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.50.

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

AOF    AUSTRALIAN UNITY OFFICE FUND

REITs - Overnight Price: $1.44

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

Australian Unity Office Fund delivered full year funds from operations of 18.8 cents per share, ahead of the company's guidance range, while a 15.2 cents per share distribution was in line.

Moelis notes the departure of Property NSW saw occupancy decline to 84.4%, from 96.9%, in what is the first of three move-outs in the coming two years that represent 54% of net lettable area. The broker assumes 69% and 74% average occupancy in FY23 and FY24.

The company does intend to dispose of three assets, using proceeds to reposition 10 Valentine and 30 Pirie. Moelis assumes a -$110m capital expenditure spend over a five year period at these assets, as well as 150 Charlotte. 

The Hold rating is retained and the target price decreases to $1.58 from $2.34.

This report was published on September 8, 2022.

Target price is $1.58 Current Price is $1.44 Difference: $0.14
If AOF meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 10.00 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 6.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.71.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 8.80 cents and EPS of 10.70 cents.
At the last closing share price the estimated dividend yield is 6.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.46.

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

ARF    ARENA REIT

REITs - Overnight Price: $3.90

Goldman Sachs rates ((ARF)) as Neutral (3) -

Following a general review of REITs under coverage following the August reporting season, Goldman Sachs lowers its target price for Arena REIT to $4.33 from $4.40.

The broker feels positive industry fundamentals provide relatively resilient and secure cash flows, which are majority government backed. 

While the largely triple net lease structures provide further comfort, a Neutral rating is kept as these positives are already factored-in to the share price, believes the analyst.

This report was published on September 2, 2022.

Target price is $4.33 Current Price is $3.90 Difference: $0.43
If ARF meets the Goldman Sachs target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $4.49, suggesting upside of 15.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 17.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.9, implying annual growth of -79.7%.
Current consensus DPS estimate is 17.5, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 21.8.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 EPS of 18.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is N/A, 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: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources


Jarden rates ((ARF)) as Underweight (4) -

In a review of the Australian REIT sector following the August reporting season, Jarden sees valuations becoming more attractive following significant year-to-date underperformance versus the broader Australian market.

The broker notes yields are well above those for direct property, and the spread over real bond yields is 80-90bps wider than the long-term average. REITs that have been able to reset interest expenses early and those with stronger top-line momentum are preferred.

For Arena REIT, Jarden retains its Underweight rating as a significant valuation premium will likely retard share price performance, despite CPI-linked rental growth and a steady development pipleline. The target falls to $4.25 from $4.35.

This report was published on September 2, 2022.

Target price is $4.25 Current Price is $3.90 Difference: $0.35
If ARF meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $4.49, suggesting upside of 15.2%(ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 17.9, implying annual growth of -79.7%.
Current consensus DPS estimate is 17.5, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 21.8.

Forecast for FY24:

Current consensus EPS estimate is N/A, 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: 0.0
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