Australian Broker Call *Extra* Edition – Nov 24, 2022

This story features AUSTRALIAN AGRICULTURAL COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: AAC

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)

AAC   CAJ   CAT (2)   CQR   CTT   CXL   EHL   MNY (2)   NSR   RRL   WPR  

AAC    AUSTRALIAN AGRICULTURAL COMPANY LIMITED

Agriculture – Overnight Price: $1.75

Bell Potter rates ((AAC)) as Upgrade to Buy from Hold (1) –

First half operating earnings from Australian Agricultural Co have come in ahead of Bell Potter's expectations at $38.3m. Operating earnings have risen 28% year-on-year and revenue 15%. 

The company is yet to provide full year guidance, but did reiterate that a strong rebound in food service continues across key markets. 

Bell Potter has updated its operating earnings forecasts 11%, -10% and -4% through to FY25, accounting for higher grain pricing in later years.

The rating is upgraded to Buy from Hold and the target price decreases to $2.15 from $2.35.

This report was published on November 18, 2022.

Target price is $2.15 Current Price is $1.75 Difference: $0.4
If AAC meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 83.33.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.00 cents.

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

CAJ    CAPITOL HEALTH LIMITED

Healthcare services – Overnight Price: $0.30

Shaw and Partners rates ((CAJ)) as Buy (1) –

Capitol Health has reported an expectedly solid trading update year-to-date. Revenue has declined -1.8% year-on-year, cycling off 9.7% growth in the previous comparable period. 

Shaw and Partners assumes first half profit will be marginally below the previous comparable period, but anticipates a material increase in the second half.

Near-term trading remains constrained but Shaw expects growth ahead, particularly given the company is undertaking recruitment to lift its workforce by 10%.

The Buy rating is retained and the target price decreases to $0.43 from $0.48.

This report was published on November 17, 2022.

Target price is $0.43 Current Price is $0.30 Difference: $0.125
If CAJ meets the Shaw and Partners target it will return approximately 41% (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 0.80 cents and EPS of 1.30 cents.
At the last closing share price the estimated dividend yield is 2.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.46.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 1.30 cents and EPS of 1.90 cents.
At the last closing share price the estimated dividend yield is 4.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.05.

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

CAT    CATAPULT GROUP INTERNATIONAL LIMITED

Medical Equipment & Devices – Overnight Price: $0.87

Bell Potter rates ((CAT)) as Hold (3) –

Despite Catapult International reporting 11% first half revenue growth to US$41.6m, the company missed the mark for Bell Potter which had assumed US$43.6m. Annual contract value rose 13% to $66.2m, but was also a -7% miss to the broker's assumption. 

Following the first half, the company has downgraded its annual contract value guidance from at least 20% growth to 20% constant currency growth. Bell Potter accordingly lowers its revenue forecasts -3%, -6% and -7% through to FY25. 

The Hold rating is retained and the target price decreases to $0.90 from $1.00.

This report was published on November 18, 2022.

Target price is $0.90 Current Price is $0.87 Difference: $0.03
If CAT meets the Bell Potter target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 23.88 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.64.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 13.16 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.61.

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

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Canaccord Genuity rates ((CAT)) as Buy (1) –

Catapult International's first half results were largely in line with Canaccord Genuity's expectations, with the company delivering constant currency annual contract value of US$70m. 

The company reiterated it expects to achieve full year annual contract value growth above 20%, which represents a sizeable step up in the second half. Canaccord Genuity expects achieving this will see Catapult International reach a free cash flow breakeven in FY24. 

The Buy rating is retained and the target price decreases to $1.50 from $2.00.

This report was published on November 18, 2022.

Target price is $1.50 Current Price is $0.87 Difference: $0.63
If CAT meets the Canaccord Genuity target it will return approximately 72% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 13.73 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.34.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 10.44 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.33.

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

CQR    CHARTER HALL RETAIL REIT

REITs – Overnight Price: $4.04

JP Morgan rates ((CQR)) as Downgrade to Underweight from Neutral (5) –

JP Morgan has reviewed its coverage of Australian REITs having lifted its cost of capital for the third time in 2022. The broker anticipates asset prices will decline -13% in the next year, with Office assets to decline -20%. 

Changes drive an average earnings per share forecast decline of -2% in FY23 and -3% in FY24. Given these changes, JP Morgan downgrades its rating on Charter Hall Retail REIT to Underweight from Neutral, noting the REIT has concentrated exposure to non-discretionary retail sales.

The target price decreases to $4.00 from $4.20. 

This report was published on November 17, 2022.

Target price is $4.00 Current Price is $4.04 Difference: minus $0.04 (current price is over target).
If CQR meets the JP Morgan target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $4.13, suggesting upside of 3.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 26.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 6.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.3, implying annual growth of -75.3%.
Current consensus DPS estimate is 25.5, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 14.1.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 25.00 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 6.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.3, implying annual growth of 3.5%.
Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 13.7.

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

CTT    CETTIRE LIMITED

Apparel & Footwear – Overnight Price: $1.34

Bell Potter rates ((CTT)) as Buy (1) –

Cettire has reported 82% monthly sales revenue year-on-year growth in October, getting the year off to a good start according to Bell Potter.

The broker warns of tough comparables in November and December, with the company cycling 191% growth in the previous comparable period.

Bell Potter expects Cettire can continue to outperform peers, anticipating its market could prove more resilient than other discretionary categories. 

The Buy rating is retained and the target price increases to $2.30 from $2.20.

This report was published on November 18, 2022.

Target price is $2.30 Current Price is $1.34 Difference: $0.96
If CTT meets the Bell Potter target it will return approximately 72% (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 2.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.63.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.41.

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

CXL    CALIX LIMITED

Mining Sector Contracting – Overnight Price: $5.37

Canaccord Genuity rates ((CXL)) as Buy (1) –

Calix reached an agreement with Heidelberg Materials for global licensing of its LEILAC technology in October, in what Canaccord Genuity described as a critical commercial milestone for the company. 

The broker considers the licensing agreement an industry first business model, and expects it will act as a blueprint for future commercial deals.

Specific projects were not confirmed as part of the agreement, but Calix expects this will emerge following completion of LEILAC-2.

The Buy rating is retained and the target price increases to $10.50 from $10.00.

This report was published on November 18, 2022.

Target price is $10.50 Current Price is $5.37 Difference: $5.13
If CXL meets the Canaccord Genuity target it will return approximately 96% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 99.44.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 134.25.

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

EHL    EMECO HOLDINGS LIMITED

Mining Sector Contracting – Overnight Price: $0.73

Canaccord Genuity rates ((EHL)) as Buy (1) –

Emeco Holdings' trading update has not met expectations, but suggests recovery and growth renewal from the second half. Canaccord Genuity highlights the company has faced a number of challenges recently, particularly within its Pit N Portal business. 

Updated guidance from the company reflects half-on-half growth of 17-39% in the second half. Given the disappointing guidance for the remainder of the first half, Canaccord Genuity does not anticipate free cash flow until later in the year.

The Buy rating is retained and the target price decreases to $0.97 from $1.10.

This report was published on November 18, 2022.

Target price is $0.97 Current Price is $0.73 Difference: $0.235
If EHL meets the Canaccord Genuity target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 2.50 cents and EPS of 11.30 cents.
At the last closing share price the estimated dividend yield is 3.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.50.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 2.90 cents and EPS of 14.30 cents.
At the last closing share price the estimated dividend yield is 3.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.14.

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

MNY    MONEY3 CORPORATION LIMITED

Business & Consumer Credit – Overnight Price: $1.86

Canaccord Genuity rates ((MNY)) as Buy (1) –

Money3 has had a slower start to the fiscal year than Canaccord Genuity had anticipated, but the company has guided to a gross loan book of $900m by end of year and net profits of $52.0m. 

The broker considers Money3's aspirations for a $1bn gross loan book in 2023 and a $3bn loan book medium-term to be achievable, but highlights competitive disadvantages faced in the last year may pose risk to nearer-term targets.

The Buy rating is retained and the target price decreases to $2.65 from $2.85.

This report was published on November 18, 2022.

Target price is $2.65 Current Price is $1.86 Difference: $0.79
If MNY meets the Canaccord Genuity target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 14.00 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 7.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.65.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 15.00 cents and EPS of 27.20 cents.
At the last closing share price the estimated dividend yield is 8.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.84.

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

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Shaw and Partners rates ((MNY)) as Buy (1) –

Money3's first quarter updated has indicated continued growth across all lines. Revenue is up 11% year-on-year, and earnings 6% on the previous comparable period.

The company also provided initial net profit guidance of $52m, which Shaw and Partners finds conservative given the potential for loan growth. The broker anticipates net profit of $53.7m. 

The Buy rating is retained and the target price decreases to $3.09 from $3.28. The broker finds the stock priced highly conservatively at current levels.

This report was published on November 17, 2022.

Target price is $3.09 Current Price is $1.86 Difference: $1.23
If MNY meets the Shaw and Partners target it will return approximately 66% (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 13.00 cents and EPS of 24.40 cents.
At the last closing share price the estimated dividend yield is 6.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.62.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 14.10 cents and EPS of 26.40 cents.
At the last closing share price the estimated dividend yield is 7.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.05.

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

NSR    NATIONAL STORAGE REIT

REITs – Overnight Price: $2.41

JP Morgan rates ((NSR)) as Downgrade to Neutral from Overweight (3) –

JP Morgan has reviewed its coverage of Australian REITs having lifted its cost of capital for the third time in 2022. The broker anticipates asset prices will decline -13% in the next year, with Office assets to decline -20%. 

Changes drive an average earnings per share forecast decline of -2% in FY23 and -3% in FY24. Given these changes, JP Morgan downgrades its rating on National Storage REIT to Neutral from Overweight, noting the stock is trading at an attractive rate to global peers. 

The target price decreases to $2.60 from $2.70. 

This report was published on November 17, 2022.

Target price is $2.60 Current Price is $2.41 Difference: $0.19
If NSR meets the JP Morgan target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $2.32, suggesting downside of -3.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 10.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 4.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.5, implying annual growth of -77.9%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 11.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 4.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.0, implying annual growth of -4.3%.
Current consensus DPS estimate is 10.4, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 21.8.

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

RRL    REGIS RESOURCES LIMITED

Gold & Silver – Overnight Price: $1.90

Canaccord Genuity rates ((RRL)) as Upgrade to Buy from Hold (1) –

In a significant step forward for Regis Resources' McPhillamy's project, the asset has been assessed and conditionally approved by the NSW Department of Planning and Environment. According to the company, approval conditions do not look to materially impact project development.

Canaccord Genuity highlights the project remains dependent on final determination from the NSW Independent Planning Commission, timing of which is uncertain. The broker allows six months for the approvals process plus an undated definitive feasibility study.

The broker considers this a positive step forward for Regis Resources. The rating is upgraded to Buy from Hold and the target price increases to $2.00 from $1.55.

This report was published on November 18, 2022.

Target price is $2.00 Current Price is $1.90 Difference: $0.1
If RRL meets the Canaccord Genuity target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.85, suggesting downside of -5.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 5.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 2.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.6, implying annual growth of 262.6%.
Current consensus DPS estimate is 2.4, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 29.5.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 6.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 3.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.1, implying annual growth of -22.7%.
Current consensus DPS estimate is 1.3, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 38.2.

Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

WPR    WAYPOINT REIT LIMITED

REITs – Overnight Price: $2.68

JP Morgan rates ((WPR)) as Overweight (1) –

JP Morgan has reviewed its coverage of Australian REITs having lifted its cost of capital for the third time in 2022. The broker anticipates asset prices will decline -13% in the next year, with Office assets to decline -20%. 

Changes drive an average earnings per share forecast decline of -2% in FY23 and -3% in FY24. The broker notes Waypoint REIT has no near-term lease expiries, and continues to make non-core asset sales which the broker expects to reduce releasing risk.  

The Overweight rating and target price of $3.00 are retained.

This report was published on November 17, 2022.

Target price is $3.00 Current Price is $2.68 Difference: $0.32
If WPR meets the JP Morgan target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $2.65, suggesting downside of -0.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 16.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 5.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of -71.5%.
Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 16.3.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 17.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 6.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of 0.6%.
Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 16.2.

Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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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.

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