Australian Broker Call *Extra* Edition – Dec 07, 2022

Daily Market Reports | Dec 07 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)

ARX   BUB   CCX (2)   CKF (2)   CRN   FPH (2)   GTK   HLA   MGH   MYX (2)   TPW   TSI   WDS   WHC  

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $1.10

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

Aroa Biosurgery has re-affirmed its FY23 outlook, which Wilsons suggests will see the business remain cashflow breakeven in FY23 and become cashflow positive thereafter.

First half revenue was a 4% beat versus the broker’s forecasts, driven by sales in Myriad, Ovitex (Tela) and other income (which includes license fees from Tela).

The analyst attributes a 400bps increase in gross margin to 81% (constant currency basis) to Myriad’s growing contribution to the sales mix and improvements in manufacturing.

Wilsons increases its target to $1.73 from $1.50 on increased earnings forecasts and a higher multiple, and retains its Overweight rating.

This report was published on November 30, 2022.

Target price is $1.73 Current Price is $1.10 Difference: $0.63
If ARX meets the Wilsons target it will return approximately 57% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

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

BUB    BUBS AUSTRALIA LIMITED

Dairy - Overnight Price: $0.30

Bell Potter rates ((BUB)) as Speculative Hold (3) -

Bell Potter adopts a more cautious forecast for near-term revenue growth after a recent shortfall in Bubs Australia's 1Q2 infant milk formula revenues versus expectation. Negative year-on-year growth is also implied by 2Q revenue guidance.

The broker lowers its target to 35c from 45c after reducing earnings forecasts and lowering the company earnings multiple. The Speculative Hold rating is unchanged.

The analyst assumes a modest year-on-year uplift in FY23 gross margin, as management is targeting growth via higher marketing and corporate costs.

This report was published on November 30, 2022.

Target price is $0.35 Current Price is $0.30 Difference: $0.05
If BUB meets the Bell Potter target it will return approximately 17% (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 minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 75.00.

Forecast for FY24:

Bell Potter forecasts a full year FY24 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 300.00.

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

CCX    CITY CHIC COLLECTIVE LIMITED

Apparel & Footwear - Overnight Price: $0.74

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

City Chic Collective has updated on its first twenty weeks of the fiscal year, with group sales to date tracking -2% below the previous comparable period. While a slight miss to Canaccord Genuity's expected 2% growth, the result was a sizeable miss to consensus expectations for 20% growth.

The result was led by an online revenue decline of -19%, with Australian online revenue down -11% and US online revenue down -12%. Physical stores performed better, with Australian storefronts up 56% on the previous comparable period. 

The Buy rating is retained and the target price decreases to $1.50 from $2.30.

This report was published on December 1, 2022.

Target price is $1.50 Current Price is $0.74 Difference: $0.755
If CCX meets the Canaccord Genuity target it will return approximately 101% (excluding dividends, fees and charges).
Current consensus price target is $1.23, suggesting upside of 64.8%(ex-dividends)
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 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 74.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of -36.7%.
Current consensus DPS estimate is 0.5, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.2, implying annual growth of 50.8%.
Current consensus DPS estimate is 2.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 8.1.

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


Wilsons rates ((CCX)) as Downgrade to Underweight from Market Weight (5) -

Weak demand in the Americas and difficulties in Europe have seen City Chic Collective report a -2% global revenue decline year-to-date, but Wilsons believes offshore operations remain key to future growth. 

The broker notes the decline followed an unseasonal inventory increase, and feels the result highlights limitations of an online-only business model. Following the update, Wilsons lowers its earnings forecasts -0.9% and -36.1% through to FY24. 

The rating is downgraded to Underweight from Market Weight and the target price decreases to $0.61 from $1.00.

This report was published on December 2, 2022.

Target price is $0.61 Current Price is $0.74 Difference: minus $0.135 (current price is over target).
If CCX meets the Wilsons target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.23, suggesting upside of 64.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 31.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of -36.7%.
Current consensus DPS estimate is 0.5, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 124.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.2, implying annual growth of 50.8%.
Current consensus DPS estimate is 2.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 8.1.

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

CKF    COLLINS FOODS LIMITED

Food, Beverages & Tobacco - Overnight Price: $7.86

Jarden rates ((CKF)) as Neutral (3) -

Despite Collins Foods delivering a roughly in line first half result, Jarden was left disappointed by commentary focused on the company's outlook.

The broker notes cuts to margin expectations suggest more rapid deceleration, particularly in Europe, while the pausing of new Taco Bell stores suggests uncertainty around the brand's future.

Jarden continues to find Collins Foods well placed in the quick-service restaurant segment, but given headwinds has a preference for competitor Domino's Pizza Enterprises ((DMP)) which it finds to have a more tangible medium-term growth outlook.

The Neutral rating is retained and the target price decreases to $8.50 from $10.55.

This report was published on November 30, 2022.

Target price is $8.50 Current Price is $7.86 Difference: $0.64
If CKF meets the Jarden target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $8.73, suggesting upside of 11.1%(ex-dividends)
The company's fiscal year ends in May.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 40.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.8, implying annual growth of -6.7%.
Current consensus DPS estimate is 26.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 17.9.

Forecast for FY24:

Jarden forecasts a full year FY24 EPS of 37.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.9, implying annual growth of -2.1%.
Current consensus DPS estimate is 25.2, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 18.3.

Market Sentiment: 0.3
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