Australian Broker Call *Extra* Edition – Sep 21, 2022

Daily Market Reports | Sep 21 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   ABB   AKE   BKL   COE   CSL   LKE   MGH   NTO   PGC   RBL   RDT   RFF   TRS  

A2M    A2 MILK COMPANY LIMITED

Dairy - Overnight Price: $5.55

Bell Potter rates ((A2M)) as Buy (1) -

After monitoring monthly export/import data from a range of sources, Bell Potter increases its target price for a2 Milk Co to $6.60 from $6.35 and maintains its Buy rating.

The broker highlights export activity ex-Australia into China has recovered from lows early in 2022 and the costs for ingredient inputs have eased from recent highs.

This report was published on September 13, 2022.

Target price is $6.60 Current Price is $5.55 Difference: $1.05
If A2M meets the Bell Potter target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $4.96, suggesting downside of -10.6%(ex-dividends)
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 16.94 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.3, 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 32.1.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 19.63 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.3, implying annual growth of 28.9%.
Current consensus DPS estimate is 3.0, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 24.9.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $2.34

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

According to JP Morgan, the broadband reseller market has become more competitive (read less profitable) due to low barriers to entry, aggressive pricing and a commoditised product.

The broker believes incumbent telcos in the residential broadband market will continue to give-up market share to smaller rivals. NBN's pricing structure is weighing on margins that are now estimated to be less than 10% over the life of a customer.

Aussie Broadband is the best placed among incumbents, according to the analyst, and is the most willing to invest to attract subscribers. As a result of such spending, however, residential margins are not expected to exceed 10%. 

The price target falls to $5.25 from $5.65, while the Overweight rating is unchanged.

This report was published on September 16, 2022.

Target price is $5.25 Current Price is $2.34 Difference: $2.91
If ABB meets the JP Morgan target it will return approximately 124% (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 23.40.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 0.00 cents and EPS of 19.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.32.

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

AKE    ALLKEM LIMITED

New Battery Elements - Overnight Price: $15.96

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

After Bell Potter raises its lithium price forecasts, FY23-25 EPS forecasts for Allkem rise by 21%, 23% and 2%, respectively, and the target price rises to $20.04 from $18.76.

As the broker expects ongoing strength in lithium demand, commodity prices and production growth, the company's cash generation should lift substantially in FY23. Buy.

This report was published on September 13, 2022.

Target price is $20.04 Current Price is $15.96 Difference: $4.08
If AKE meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $16.21, suggesting upside of 1.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 15.00 cents and EPS of 152.90 cents.
At the last closing share price the estimated dividend yield is 0.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.4, implying annual growth of 39.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 16.1.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 40.00 cents and EPS of 188.60 cents.
At the last closing share price the estimated dividend yield is 2.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 119.0, implying annual growth of 19.7%.
Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 13.4.

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

BKL    BLACKMORES LIMITED

Health & Nutrition - Overnight Price: $67.68

Goldman Sachs rates ((BKL)) as Initiation of coverage with Neutral (3) -

Goldman Sachs feels the current Blackmores' share price currently captures the significant longer term growth opportunity, and initiates coverage with a Neutral rating and $76.50 target price.

Blackmores is a vitamin and health supplements brand/manufacturer supplying A&NZ, China (online only) and Other International Markets.

The broker expects a 20bps gross margin expansion in FY23 as cost-out initiatives are largely offset by cost-of-goods-sold inflation. A further 20bps increase in FY24 margin is expected from an easing of freight costs.

This report was published on September 9, 2022.

Target price is $76.50 Current Price is $67.68 Difference: $8.82
If BKL meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $74.05, suggesting upside of 9.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 118.80 cents and EPS of 199.00 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 213.7, implying annual growth of 35.3%.
Current consensus DPS estimate is 129.1, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 31.7.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 155.00 cents and EPS of 259.70 cents.
At the last closing share price the estimated dividend yield is 2.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 264.7, implying annual growth of 23.9%.
Current consensus DPS estimate is 160.0, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 25.6.

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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