Daily Market Reports | May 25 2023
An additional news report on the recommendation, valuation, forecast and opinion changes and updates 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)
5GG A2B ABP ASB BXB CCX (2) CGC DSK EBR ELD EOS GT1 HT1 NUF OFX PEN QBE QIP RED XRO (2)
QBE QBE INSURANCE GROUP LIMITED
Insurance - Overnight Price: $14.74
Jarden rates ((QBE)) as Buy (1) -
Jarden's analysis suggests QBE Insurance's liability reserves in North America have moved further ahead of peers over FY22, and the risk of further US reserve top-ups appears low.
Amid a reacceleration in pricing and mix as a benefit from exiting unprofitable catastrophe-program business, the broker envisages scope for the North American COR to hit 95% by FY24. Buy rating retained. Target rises to $19.65 from $19.25.
This report was published on May 22, 2023.
Target price is $19.65 Current Price is $14.74 Difference: $4.91
If QBE meets the Jarden target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $16.13, suggesting upside of 9.5%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY23:
Jarden forecasts a full year FY23 dividend of 104.92 cents and EPS of 145.12 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 10.16.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 139.4, implying annual growth of N/A.
Current consensus DPS estimate is 110.5, implying a prospective dividend yield of 7.5%.
Current consensus EPS estimate suggests the PER is 10.6.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 125.61 cents and EPS of 174.97 cents.
At the last closing share price the estimated dividend yield is 8.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.42.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 168.3, implying annual growth of 20.7%.
Current consensus DPS estimate is 120.0, implying a prospective dividend yield of 8.1%.
Current consensus EPS estimate suggests the PER is 8.8.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
QIP QANTM INTELLECTUAL PROPERTY LIMITED
Legal - Overnight Price: $0.85
Petra Capital rates ((QIP)) as Buy (1) -
Qantm Intellectual Property has outlined its strategic direction and provided reasons for increasing market share. Petra Capital is comfortable with the market position and awaits further commentary on the IT transformation project.
Patent applications for the nine months to March were up 4.6% and market share increased to 16.2%. The broker does not believe the stock price reflects intrinsic value, particularly given the defensive qualities and level of free cash flow.
Buy rating maintained. Target is $1.56.
This report was published on May 19, 2023.
Target price is $1.56 Current Price is $0.85 Difference: $0.71
If QIP meets the Petra Capital target it will return approximately 84% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Petra Capital forecasts a full year FY23 dividend of 6.10 cents and EPS of 10.40 cents.
At the last closing share price the estimated dividend yield is 7.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.17.
Forecast for FY24:
Petra Capital forecasts a full year FY24 dividend of 7.10 cents and EPS of 10.90 cents.
At the last closing share price the estimated dividend yield is 8.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.80.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
RED RED 5 LIMITED
Gold & Silver - Overnight Price: $0.15
Canaccord Genuity rates ((RED)) as Speculative Buy (1) -
A general update on the ASX-listed gold sector, through Canaccord Genuity's recent mining conference, shows the broker's rating for Red 5 is now Speculative Buy, with a price target of 28c.
This report was published on May 19, 2023.
Target price is $0.28 Current Price is $0.15 Difference: $0.13
If RED meets the Canaccord Genuity target it will return approximately 87% (excluding dividends, fees and charges).
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
XRO XERO LIMITED
Accountancy - Overnight Price: $108.75
Jarden rates ((XRO)) as Overweight (2) -
The FY23 results have allayed Jarden's fears of softer subscriber numbers. Moreover, average revenue per unit improved.
The broker considers Xero high-quality with a long runway for growth and a large total addressable market of which the company only captures 8% presently. The broker assumes a free cash flow yield 10% in FY24 but does not expect the company will reach the "rule of 40" until FY30.
The Overweight rating is reiterated while the target is increased to $106 from $92.
This report was published on May 19, 2023.
Target price is $106.00 Current Price is $108.75 Difference: minus $2.75 (current price is over target).
If XRO meets the Jarden target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $103.57, suggesting downside of -4.8%(ex-dividends)
The company's fiscal year ends in March.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 73.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 147.16.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 86.7, 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 125.4.
Forecast for FY25:
Jarden forecasts a full year FY25 EPS of 107.01 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 101.63.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 143.5, implying annual growth of 65.5%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 75.8.
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Wilsons rates ((XRO)) as Overweight (1) -
Xero produced solid volume growth in FY23 as well as stronger prices, Wilsons notes. The broker highlights the operating leverage, with a material adjustment in the cost base as around 15% of staff leave. Hence, the business will enter FY24 leaner and more efficient.
Wilsons continues to apply an EV/sales multiple to FY24 forecasts, which increases to 12x, and means the target rises to $126.32 from $98.89. The increase is considered justifiable, given market-leading churn through a volatile economic period. Overweight.
This report was published on May 22, 2023.
Target price is $126.32 Current Price is $108.75 Difference: $17.57
If XRO meets the Wilsons target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $103.57, suggesting downside of -4.8%(ex-dividends)
The company's fiscal year ends in March.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 108.84 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 99.92.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 86.7, 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 125.4.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 191.06 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 56.92.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 143.5, implying annual growth of 65.5%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 75.8.
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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