Australian Broker Call *Extra* Edition – Apr 13, 2022

This story features BLUESCOPE STEEL LIMITED, and other companies. For more info SHARE ANALYSIS: BSL

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)

BSL   CGS   IEL   LKE   LYC   PDN   PME (2)   PTM   RMD   TLX   WPL  

BSL    BLUESCOPE STEEL LIMITED

Steel & Scrap – Overnight Price: $21.26

Jarden rates ((BSL)) as Buy (2) –

In what Jarden considers could be a significant strategic step, BlueScope Steel has entered into a binding agreement to acquire Coil Coatings for -US$500m. The company is the second-largest metal painter in the US.

The transaction could enable the North American business to transform its focus to a value-added product (like Colorbond and Truecore in Australia) from a commodity product.

Management believes building an equivalent business from the ground up would have taken around 10-15 years, and cost more than -$1bn.

The Overweight rating and $23.60 target price are retained.

This report was published on April 12, 2022.

Target price is $23.60 Current Price is $21.26 Difference: $2.34
If BSL meets the Jarden target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $26.05, suggesting upside of 21.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 50.00 cents and EPS of 483.80 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 514.3, implying annual growth of 117.0%.
Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 4.2.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 50.00 cents and EPS of 484.50 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 308.7, implying annual growth of -40.0%.
Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 6.9.

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

CGS    COGSTATE LIMITED

Medical Equipment & Devices – Overnight Price: $2.20

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

Canaccord Genuity notes the opportunity to use larger-scale patient registries for reimbursement, for companies investigating monoclonal antibodies for Alzheimer's. This follows a determination from the Center for Medicare Services in the US.

The analyst feels this aides the environment for Cogstate's digital tool, with its ability to detect changes in an individual's cognitive ability.

Canaccord Genuity points out Cogstate has a 13% market share in the Alzheimer’s space, and 40% of trials still use paper and pencil tests.

The Buy rating and $2.50 target price are unchanged.

This report was published on April 11, 2022.

Target price is $2.50 Current Price is $2.20 Difference: $0.3
If CGS meets the Canaccord Genuity target it will return approximately 14% (excluding dividends, fees and charges).

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

IEL    IDP EDUCATION LIMITED

Education & Tuition – Overnight Price: $27.32

Goldman Sachs rates ((IEL)) as Buy (1) –

Goldman Sachs continues to expect strong improvement in student placement volumes in Australia in the second half, backed by student visa data from the Statistics Bureau, and the anticipated 100% growth in placement volumes should directly benefit IDP Education. 

The broker anticipates 12,900 student placements in the second half, with recovery over coming financial years to build to pre-pandemic levels in FY24. Further, Goldman Sachs notes student volumes in the northern hemisphere have already outstripped pre-pandemic.

Earnings per share estimates increase 1.2%, 1.2% and 1.0% through to FY24.

The Buy rating is retained and the target price increases to $35.50 from $35.00.

This report was published on April 13, 2022.

Target price is $35.50 Current Price is $27.32 Difference: $8.18
If IEL meets the Goldman Sachs target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $36.80, suggesting upside of 33.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 22.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 0.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 73.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.1, implying annual growth of 174.0%.
Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 70.7.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 41.00 cents and EPS of 58.00 cents.
At the last closing share price the estimated dividend yield is 1.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.8, implying annual growth of 63.2%.
Current consensus DPS estimate is 46.0, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 43.3.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

LKE    LAKE RESOURCES N.L.

New Battery Elements – Overnight Price: $1.84

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

Lake Resources has announced memorandums of understanding with both Hanwa and Ford for 25,000 tonnes per annum each, accounting for the full 50,000 tonnes per annum initial lithium product offtake anticipated from the Kachi project. 

Bell Potter highlights the agreements add weight to Lake Resources' ongoing finance and pre-development activities for Kachi. Bell Potter expects the company to deliver a definitive feasibility study in the September quarter.  

The Buy rating is retained and the target price increases to $2.83 from $1.82.

This report was published on April 12, 2022.

Target price is $2.83 Current Price is $1.84 Difference: $0.99
If LKE meets the Bell Potter target it will return approximately 54% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 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 306.67.

Forecast for FY23:

Bell Potter forecasts a full year FY23 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 1840.00.

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

LYC    LYNAS RARE EARTHS LIMITED

Rare Earth Minerals – Overnight Price: $9.69

Goldman Sachs rates ((LYC)) as Initiation of coverage with Neutral (3) –

Goldman Sachs initiates coverage on Lynas Rare Earths, a leading producer of neodymium and praseodynium elements. With the market dominated by China, Lynas Rare Earths offers exposure to the neodymium and praseodynium outside of China.

While spot pricing for the elements is currently US$135/kilo following a more than doubling of prices in the last year, Goldman Sachs expects price deficits ahead, predicting prices to moderate to US$100/kilo over 2022 and 2023, and decline to US$80/kilo long term.

The company maintains a 10,500 tonnes per annum production target which could exceed 12,000 tonnes based on the resource at its Mt Weld project, but the broker sees risk in the execution and expenditure required to reach higher production.

The broker initiates with a Neutral rating and a target price of $9.50.

This report was published on April 13, 2022.

Target price is $9.50 Current Price is $9.69 Difference: minus $0.19 (current price is over target).
If LYC meets the Goldman Sachs target it will return approximately minus 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 0.00 cents and EPS of 61.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.89.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 0.00 cents and EPS of 55.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.62.

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

PDN    PALADIN ENERGY LIMITED

Uranium – Overnight Price: $0.83

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

Canaccord Genuity trims its price target for Paladin Energy to $1.02 from $1.05 following the recent $200m capital raising.

In light of recent geopolitical events, including some protests in Kazakhstan (which produces 46% of the world's uranium), the analyst feels large utilities will aim to diversify supply. This would be considered a major positive for Paladin Energy's Langer Heinrich mine.

The broker notes Paladin Energy is one of the first restart projects to secure an offtake agreement with a tier one utility (Duke Energy), lending further credence to Langer Heinrich.

Now, with Europe seeking to reduce its reliance on Russian gas, the broker anticipates a greater share for nuclear in the overall energy mix. Buy.

This report was published on April 11, 2022.

Target price is $1.02 Current Price is $0.83 Difference: $0.19
If PDN meets the Canaccord Genuity target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.22 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 68.14.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.81 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 102.22.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

PME    PRO MEDICUS LIMITED

Medical Equipment & Devices – Overnight Price: $47.12

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

Pro Medicus has announced a contract win with Inova Health for an eight year deal with a minimum revenue of $32m. Bell Potter highlights this latest award brings the company's contracted revenue to a minimum of $386m over the next five years. 

With four of Pro Medicus' last five contract announcements being integrated delivery network clients, it appears to be the company's fastest growing and likely largest segment according to Bell Potter, offering long term opportunity.

Rollout for Inova Health is expected to commence in the second half of 2022.

The Buy rating and target price of $55.00 are retained.

This report was published on April 12, 2022.

Target price is $55.00 Current Price is $47.12 Difference: $7.88
If PME 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 FY22:

Bell Potter forecasts a full year FY22 dividend of 21.80 cents and EPS of 43.30 cents.
At the last closing share price the estimated dividend yield is 0.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 108.82.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 27.50 cents and EPS of 55.10 cents.
At the last closing share price the estimated dividend yield is 0.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 85.52.

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

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Goldman Sachs rates ((PME)) as Sell (5) –

In one of the largest contract wins to-date, Goldman Sachs notes Pro Medicus announced an eight-year, $32m deal with Inova
Health System.

The contract for the non-profit integrated Delivery Network's (IDN) is based on the transactional licensing model for Visage 7. The analyst points out the contract with an IDN further demonstrates client diversification beyond the traditional top-tier, academic hospitals.

Nonetheless, the broker retains a Sell rating given the company's elevated valuation and the contract win only represents a portion of forecast contract wins. The price target is set at $44.80.

This report was published on April 11, 2022.

Target price is $44.80 Current Price is $47.12 Difference: minus $2.32 (current price is over target).
If PME meets the Goldman Sachs target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 22.00 cents and EPS of 41.00 cents.
At the last closing share price the estimated dividend yield is 0.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 114.93.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 29.00 cents and EPS of 53.00 cents.
At the last closing share price the estimated dividend yield is 0.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 88.91.

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

PTM    PLATINUM ASSET MANAGEMENT LIMITED

Wealth Management & Investments – Overnight Price: $1.85

Jarden rates ((PTM)) as Underweight (2) –

Following outflows of -$222m in March, Platinum Asset Management's quarterly outflows totaled -$561m, largely in line with Jarden's expected -$550m. Jarden highlighted the International Fund's 550 basis point gain from January was lost to performance regression. 

The broker now anticipates outflows of  -$2.0bn in FY22 and -$1.4bn in FY23 as the International Fund continues to lag, noting this is below consensus forecasts by -$300-400m in each year. 

Earnings per share forecasts have been revised downwards -3.5% and -11.3% for FY22 and FY23. The Underweight rating is retained and the target price decreases to $2.00 from $2.20.

This report was published on April 11, 2022.

Target price is $2.00 Current Price is $1.85 Difference: $0.15
If PTM meets the Jarden target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $2.27, suggesting upside of 23.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 19.30 cents and EPS of 19.40 cents.
At the last closing share price the estimated dividend yield is 10.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.2, implying annual growth of -24.7%.
Current consensus DPS estimate is 19.7, implying a prospective dividend yield of 10.7%.
Current consensus EPS estimate suggests the PER is 8.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 14.30 cents and EPS of 16.70 cents.
At the last closing share price the estimated dividend yield is 7.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.8, implying annual growth of -16.0%.
Current consensus DPS estimate is 17.3, implying a prospective dividend yield of 9.4%.
Current consensus EPS estimate suggests the PER is 10.3.

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

RMD    RESMED INC

Medical Equipment & Devices – Overnight Price: $32.05

Jarden rates ((RMD)) as Buy (2) –

Jarden expects Philips may have to content with a higher number of device repair and replacements than expected following the mandate issued by the FDA to improve communication around its recall, offering further opportunity to ResMed. 

The broker notes Philips indicated earlier this year it expected the recall to include 5.2m devices, up from an initial 3.5m, but the FDA order could prompt further customers to come forward, likely delaying Philips' return to market beyond December as anticipated. 

The broker highlighted data suggested a 4% increase in web traffic since the FDA order, suggesting an increase in recall activity. 

The Overweight rating and target price of $38.91 are retained.

This report was published on April 11, 2022.

Target price is $38.91 Current Price is $32.05 Difference: $6.86
If RMD meets the Jarden target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $37.84, suggesting upside of 19.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 233.80 cents and EPS of 847.38 cents.
At the last closing share price the estimated dividend yield is 7.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 79.3, implying annual growth of N/A.
Current consensus DPS estimate is 22.7, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 39.8.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 297.39 cents and EPS of 1054.26 cents.
At the last closing share price the estimated dividend yield is 9.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.8, implying annual growth of 22.1%.
Current consensus DPS estimate is 24.2, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 32.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

TLX    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $4.35

Wilsons rates ((TLX)) as Overweight (1) –

Telix Pharmaceuticals has secured the rights to develop variants of Eli Lilly's olaratumab treatment in a US$5m licensing deal. Wilsons notes Eli Lilly stands to gain a further US$225m in milestone payments on successful product development. 

Further, the broker highlights Telix Pharmaceuticals holds a back-license option, granting access to companion diagnostics that could be worth US$35m for the company. The treatment was withdrawn from the market following failure of a Phase III test, the reasons for which are not clear.

The Overweight rating and target price of $8.50 are retained.

This report was published on April 12, 2022.

Target price is $8.50 Current Price is $4.35 Difference: $4.15
If TLX meets the Wilsons target it will return approximately 95% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 27.88.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 10.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 41.04.

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

WPL    WOODSIDE PETROLEUM LIMITED

NatGas – Overnight Price: $32.06

Jarden rates ((WPL)) as Downgrade to Overweight from Buy (2) –

Woodside Petroleum has released an explanatory memorandum ahead of the shareholders vote for the proposed BHP Petroleum merger. Jarden notes Woodside Petroleum would acquire BHP Petroleum under the proposal, with BHP Group ((BHP)) shareholders issued one Woodside Petroleum share for every 5.53 BHP shares held.

Woodside Petroleum is anticipated the merged group to generate $46bn in operating cash flow and $25bn in free cash flow through to FY27, excluding costs and benefits of synergies.

The rating is downgraded to Overweight from Buy and the target price decreases to $33.50 from $35.00.

This report was published on April 11, 2022.

Target price is $33.50 Current Price is $32.06 Difference: $1.44
If WPL meets the Jarden target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $30.52, suggesting downside of -5.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 281.42 cents and EPS of 448.65 cents.
At the last closing share price the estimated dividend yield is 8.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 335.5, implying annual growth of N/A.
Current consensus DPS estimate is 205.3, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 9.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 188.07 cents and EPS of 373.43 cents.
At the last closing share price the estimated dividend yield is 5.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 265.0, implying annual growth of -21.0%.
Current consensus DPS estimate is 159.3, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 12.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
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.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

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