Australian Broker Call *Extra* Edition – Jun 02, 2022

This story features ALS LIMITED, and other companies. For more info SHARE ANALYSIS: ALQ

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)

ALQ   CGC (2)   CIA   EDV   FPH   GEN   NAN (3)   PDL   RTR   S32   TAH   TLC   TNE   TOY   VHT   WBC  

ALQ    ALS LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $12.84

Jarden rates ((ALQ)) as Overweight (2) –

ALS Ltd reported FY22 earnings result of $264.2m at the top end of the guidance range and slightly better than consensus, according to Jarden.

The company has continued to increase capacity in the Commodities division which will benefit earnings in FY23, as well as expected improvements in pricing according to Jarden. 

The broker cited that the Life Sciences business continues to recover post covid and is expected to contribute more meaningfully to earnings. Jarden suggests the quality and reliability of the Life Sciences earnings could drive a higher valuation.

ALS earnings forecasts have been raised by 5% for FY23 and FY24 due to the ongoing improvement in the key businesses.

The target price has been reduced to $13.00 from $13.80 and the Overweight rating is retained.

This report was published on May 25, 2022.

Target price is $13.00 Current Price is $12.84 Difference: $0.16
If ALQ meets the Jarden target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $13.78, suggesting upside of 7.3%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 37.50 cents and EPS of 61.00 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.6, implying annual growth of 58.5%.
Current consensus DPS estimate is 36.8, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 20.5.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 35.00 cents and EPS of 68.10 cents.
At the last closing share price the estimated dividend yield is 2.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.8, implying annual growth of 5.1%.
Current consensus DPS estimate is 38.4, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 19.5.

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

CGC    COSTA GROUP HOLDINGS LIMITED

Agriculture – Overnight Price: $3.22

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

Costa Group Holdings' AGM resulted in some minor earnings revisions to forecasts from Goldman Sachs.

The broker noted that there has been strong pricing across a number of products – truss tomatoes, mushrooms and export citrus.

Goldman Sachs also cited that China Berry (70% owned) should experience a normalisation of growth with an easing of the lockdowns.

Regarding costs the broker notes price strength has exceeded the cost inflation and Costa Group has been able to manage labour costs, that represent around 40% of total costs.

Following the AGM update, Goldman Sachs has marginally adjusted earnings 0.8% and -2.1% for FY22 and FY23, respectively.

The Buy rating is retained and the target price decreases to $3.80 from $3.85.

This report was published on May 25, 2022.

Target price is $3.80 Current Price is $3.22 Difference: $0.58
If CGC meets the Goldman Sachs target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $3.63, suggesting upside of 12.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 11.00 cents and EPS of 17.30 cents.
At the last closing share price the estimated dividend yield is 3.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.4, implying annual growth of 62.6%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 12.00 cents and EPS of 21.80 cents.
At the last closing share price the estimated dividend yield is 3.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.8, implying annual growth of 28.6%.
Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 16.3.

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

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Jarden rates ((CGC)) as Overweight (2) –

Jarden believes that Costa Group offered a positive trading up at the company's AGM with the broker citing that the international businesses and local pricing had improved, which have offset cost pressures.

The broker believes it is positive that Costa Group has maintained the full year guidance noting the lease costs, depreciation and amortisation as well as capital expenditure.

Jarden has maintained earnings forecasts and notes they were recently cut to due to potential headwinds from supply chain and international pricing and believes the company is a global leader but has the potential to be impacted by weather and supply problems as an agricultural company.

An overweight rate is maintained with a $3.50 price target.

This report was published on May 25, 2022.

Target price is $3.50 Current Price is $3.22 Difference: $0.28
If CGC meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $3.63, suggesting upside of 12.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 EPS of 17.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.4, implying annual growth of 62.6%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY23:

Jarden forecasts a full year FY23 EPS of 19.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.8, implying annual growth of 28.6%.
Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 16.3.

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

CIA    CHAMPION IRON LIMITED

Iron Ore – Overnight Price: $7.47

Goldman Sachs rates ((CIA)) as Downgrade to Neutral from Buy (3) –

Champion Iron's FY22 full-year result met Goldman Sachs' estimates but fell -3% shy of consensus.

The broker is positive on the short-to-medium term forecast for high-grade iron ore, and on the company's production and earnings growth but spies higher freight rates in the near term.

FY23-FY24 EPS forecasts fall -8% on the FY22 result.

Rating downgraded to Neutral from Buy after the recent share price rally. Target price falls -5% to $7.90 from $8.30.

This report was published on May 26, 2022.

Target price is $7.90 Current Price is $7.47 Difference: $0.43
If CIA meets the Goldman Sachs target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 42.34 cents and EPS of 84.67 cents.
At the last closing share price the estimated dividend yield is 5.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.82.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 59.71 cents and EPS of 96.61 cents.
At the last closing share price the estimated dividend yield is 7.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.73.

This company reports in CAD. 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

EDV    ENDEAVOUR GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $7.30

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

Endeavour Group has pre-published its strategy-day presentation and Goldman Sachs considers the capital allocation and capital expenditure outlook to be the two positive takeaways.

Sustaining capital expenditure forecasts were pegged between $200m to $260m a year, and growth capital expenditure was pegged at $120m to $200m a year, compared with the broker's forecasts of of $356m in FY22 and $462m in FY23.

Target price steady at $8.30. Buy rating retained.

This report was published on May 26, 2022.

Target price is $8.30 Current Price is $7.30 Difference: $1
If EDV meets the Goldman Sachs target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $7.46, suggesting upside of 2.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 20.60 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 2.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.8, implying annual growth of 11.9%.
Current consensus DPS estimate is 20.9, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 26.3.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 20.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 2.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.9, implying annual growth of 11.2%.
Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 23.6.

Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

FPH    FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED

Medical Equipment & Devices – Overnight Price: $18.76

Jarden rates ((FPH)) as Overweight (2) –

Jarden comments Fisher & Paykel Healthcare's reported FY22 earnings proved in-line with expectations. The -30% decline in profits was due to the year-on-year comparison of the covid-related surge in demand for hardware the previous year, the broker explains.

Looking ahead the broker highlighted Fisher & Paykel Healthcare announced two new products in Hospital (Optiflow Anethesia – Switch & Trace and Airvo 3) and the company increased the potential total addressable market to NZ$25bn from NZ$20bn. The company provided no guidance which was expected by Jarden.

The earnings forecast for FY23 was marginally adjusted by the broker -4%,and the reduction in the price target is in line with the broker's higher risk free rates for the overall coverage of New Zealand companies.

The rating is maintained at Overweight and the target price decreases to NZ$25.00 from NZ$30.00.

This report was published on May 25, 2022.

Current Price is $18.76. Target price not assessed.
Current consensus price target is $21.10, suggesting upside of 12.5%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 38.99 cents and EPS of 48.86 cents.
At the last closing share price the estimated dividend yield is 2.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.2, implying annual growth of N/A.
Current consensus DPS estimate is 34.2, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 38.9.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 40.87 cents and EPS of 63.14 cents.
At the last closing share price the estimated dividend yield is 2.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.4, implying annual growth of 10.8%.
Current consensus DPS estimate is 33.7, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 35.1.

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

GEN    GENMIN LIMITED

Iron Ore – Overnight Price: $0.20

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

Genmin has published a maiden Mineral Resource for the Bandjougoy Prospect at its Baniaka iron ore project in Gabon.

Bell Potter says the discovery increases the global resource at Baniaka to 696.7Mt from 260.4Mt, sharply outpacing the broker's expectations.

The company has also signed a memorandum of understanding with Gabon's state-owned utility in control of the Grand Poubara hydropower station near Baniaka, for a binding, long-term power supply agreement at less than US10c/k/Wh.

The broker believes the latter agreement considerably derisks the project and underpins a very competitive cost base for the project, while simultaneously raising the company's ESG profile.

Speculative Buy rating retained. Target price rises 5% to 45c.

This report was published on June 26, 2022.

Target price is $0.45 Current Price is $0.20 Difference: $0.25
If GEN meets the Bell Potter target it will return approximately 125% (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 minus 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.11.

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

NAN    NANOSONICS LIMITED

Medical Equipment & Devices – Overnight Price: $3.70

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

Bell Potter reports the transition of customer data from GE Healthcare to Nanosonics in the US has commenced smoothly, and the company expects the transition will be complete for the majority of customers by the end of June.

Company commentary suggests no disruption of consumable supply to customers is expected from the transition. Bell Potter also notes installed Trophon devices continue to grow, with the broker predicting 29,680 installed devices by the end of June.

The Hold rating and target price of $3.95 are retained.

This report was published on May 26, 2022.

Target price is $3.95 Current Price is $3.70 Difference: $0.25
If NAN meets the Bell Potter target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $4.34, suggesting upside of 17.4%(ex-dividends)
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 minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 528.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, 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 N/A.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 75.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.1, 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 90.2.

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

An update from Nanosonics outlined an on-track transition to a direct sales model, with all customers notified of the transition and completion in-line with the timeline, while revenue progresses well and looks to meet full year consensus expectations, notes Canaccord Genuity.

The broker highlighted the update elicited a positive market response, with the company's share price lifting 1.8% as the update provided clarity around Nanosonics' outlook for the remainder of FY22.

The Buy rating is retained and the target price decreases to $4.78 from $7.26.

This report was published on May 26, 2022.

Target price is $4.78 Current Price is $3.70 Difference: $1.08
If NAN meets the Canaccord Genuity target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $4.34, suggesting upside of 17.4%(ex-dividends)
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 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 205.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, 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 N/A.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 185.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.1, 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 90.2.

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

Nanosonics provided a trading update which showed that FY22 revenue will be in-line with the current market consensus of $116m, notes Goldman Sachs.

The broker highlights the company made no mention of either costs or margins and that the global installed base of Trophon increased by 740 units in Q3 FY22 to 28,900 units, in-line with the Q2 FY22 rise of 750 units.

Goldman Sachs continues to express concerns regarding the short to medium term transition of GE customers to Nanosonics and whilst the longer-term pass through model with GM may prove beneficial, the broker feels that the loss of GM as re-seller could negatively impact on the sales trajectory.

The broker thinks the elevated PER of 50x is too high when taking into account the risks. A Sell rating is retained and the forecast price target is $3.40.

This report was published on May 25, 2022.

Target price is $3.40 Current Price is $3.70 Difference: minus $0.3 (current price is over target).
If NAN meets the Goldman Sachs target it will return approximately minus 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $4.34, suggesting upside of 17.4%(ex-dividends)
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 minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 370.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.8, 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 N/A.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 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 92.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.1, 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 90.2.

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

PDL    PENDAL GROUP LIMITED

Wealth Management & Investments – Overnight Price: $5.22

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

Bell Potter has met with Perpetual ((PPT)) management and suspects Pendal Group's rejection may not be the end of the matter.

The broker also contacted Pendal regarding the buyback, only to find it has not yet started. 

Bell Potter remains sceptical about Pendal's cost guidance but acknowledges it has provided room to move, but says the pressure is now on to deliver.

Buy rating and $6.90 target price retained.

This report was published on May 27, 2022.

Target price is $6.90 Current Price is $5.22 Difference: $1.68
If PDL meets the Bell Potter target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $5.93, suggesting upside of 13.6%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 46.00 cents and EPS of 50.40 cents.
At the last closing share price the estimated dividend yield is 8.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.5, implying annual growth of 1.0%.
Current consensus DPS estimate is 45.8, implying a prospective dividend yield of 8.8%.
Current consensus EPS estimate suggests the PER is 9.9.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 44.00 cents and EPS of 47.60 cents.
At the last closing share price the estimated dividend yield is 8.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.1, implying annual growth of -12.2%.
Current consensus DPS estimate is 41.3, implying a prospective dividend yield of 7.9%.
Current consensus EPS estimate suggests the PER is 11.3.

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

RTR    RUMBLE RESOURCES LIMITED

Mining – Overnight Price: $0.32

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

Rumble Resources has reported drilling results for Tonka and Chinook, and Bell Potter says the results indicate high-grade structure.

The broker is extremely positive on the quality, scale and life of the Earaheedy prospect.

Buy rating and 60c target price retained.

This report was published on May 27, 2022.

Target price is $0.60 Current Price is $0.32 Difference: $0.28
If RTR meets the Bell Potter target it will return approximately 87% (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 minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.40.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $4.96

Goldman Sachs rates ((S32)) as Buy (1) –

Goldman Sachs revised down earnings forecast for South32 by -1% and -2%, for FY22 and FY23, respectively after the company's strategy update.

The broker highlights South32 management has emphasised the 'optimise, unlock, identify' strategy, including an ongoing focus on growth in base metal production (aluminum, copper, zinc/lead and nickel).

The company is also looking at manganese and met coal growth and possible replacement.

Goldman Sachs cites an increase in capex to US$1.2bn by FY24 with an increase in costs for decarbonisation and higher focus on growth.

South32 will look to maintain strong balance sheet whilst continuing to return capital to shareholders, via, either special dividends and on-market share buy-backs, the analysts report.

Goldman Sachs reduced its Net Asset Value (NAV) calculation by -2% to $4.97 from $5.10 reflecting higher costs, capex and working capital.

South32 is Buy rated. Target price eases to $5.50 from $5.70.

This report was published on May 25, 2022.

Target price is $5.50 Current Price is $4.96 Difference: $0.54
If S32 meets the Goldman Sachs target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $6.05, suggesting upside of 22.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 41.05 cents and EPS of 71.16 cents.
At the last closing share price the estimated dividend yield is 8.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 83.9, implying annual growth of N/A.
Current consensus DPS estimate is 38.1, implying a prospective dividend yield of 7.7%.
Current consensus EPS estimate suggests the PER is 5.9.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 67.05 cents and EPS of 84.84 cents.
At the last closing share price the estimated dividend yield is 13.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.7, implying annual growth of 15.3%.
Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 8.9%.
Current consensus EPS estimate suggests the PER is 5.1.

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

TAH    TABCORP HOLDINGS LIMITED

Gaming – Overnight Price: $0.91

Goldman Sachs rates ((TAH)) as Downgrade to Neutral from Buy (3) –

Following the demerger of Tabcorp's Lottery Business ((TLC)), Goldman Sachs has re-visited the earnings forecasts to reflect the removal of Lottery and Keno earnings. 

The broker notes forecasts for Wagering/Media and Gaming Services remain predominantly unchanged from the estimates pre the demerger.

Goldman Sachs believes that management will now be able to focus on the core Wagering business as well as improving the digital offering as management attempts to stabilise market share.

Based on FY23 earnings forecasts, Goldman Sachs notes the stock is trading at 5.5x, compared to the 5-year average of 11x or 8x pre the Lottery merger and that for the second half of FY22 shareholders will receive five of the six months of earnings and dividends from the Lottery/Keno business.

The broker highlights the accompanying second half 6.5c dividend and first half FY23 dividend of 1.4c offers a 12-month yield of 8%, compared with the 4% average 12-month yield.

The rating has been downgraded to Neutral from Buy and the price target reduced to $1.07 from $6.25 (to account for the demerger).

This report was published on May 25, 2022.

Target price is $1.07 Current Price is $0.91 Difference: $0.16
If TAH meets the Goldman Sachs target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $2.37, suggesting upside of 160.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 13.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 14.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.4, implying annual growth of -23.7%.
Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 12.7%.
Current consensus EPS estimate suggests the PER is 9.7.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 3.00 cents and EPS of 4.00 cents.
At the last closing share price the estimated dividend yield is 3.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.5, implying annual growth of -9.6%.
Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 6.8%.
Current consensus EPS estimate suggests the PER is 10.7.

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

TLC    LOTTERY CORPORATION LIMITED

Gaming – Overnight Price: $4.60

Jarden rates ((TLC)) as Initiation of coverage with Neutral (3) –

Jarden has initiated coverage of the newly formed company, Lottery Corp, from the demerger of Tabcorp's Lotteries and Keno business.

The broker notes the company is able to remain highly leveraged with a relatively high credit rating and a low cost of debt due to the fact that Lottery Corp has a strong competitive advantage with an industry that is heavily regulated with high barriers to entry, which leads to earnings stability and resilience. 

Jarden points out there is no license renewal risk until 2028 in Victoria and finds the stock appears to discount growth in both the Digital and OzLotto businesses, as well as possible corporate interest.

A neutral rate and a price target of $4.52 is initiated for Lottery Corp.

This report was published on May 25, 2022.

Target price is $4.52 Current Price is $4.60 Difference: minus $0.08 (current price is over target).
If TLC meets the Jarden target it will return approximately minus 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $5.08, suggesting upside of 10.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 13.00 cents and EPS of 16.20 cents.
At the last closing share price the estimated dividend yield is 2.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.2, 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 28.4.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 13.00 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 2.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.5, implying annual growth of 8.0%.
Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 26.3.

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

TNE    TECHNOLOGY ONE LIMITED

IT & Support – Overnight Price: $10.63

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

TechnologyOne reported H1 FY22 earnings that showed stronger than expected annual recurring revenue (ARR) and softer margins according to Goldman Sachs.

The broker believes the company is on a firm footing to reach ARR of $500m with an increase in the rate of transition to the SaaS business model and an improvement in the new business growth in the UK, as well as cross-selling into the existing customer base.

Goldman Sachs increased revenue forecasts but reduced margins that lowered earnings forecasts before tax by -1% and -3%, respectively for FY22 and FY23. 

The company is considered by the broker to offer stable earnings given the low churn and defensive public sector markets as well as being on track to become a pure SaaS business.

The price target has been reduced to $13.30 from $13.90 and a Buy rating is maintained.

This report was published on May 24, 2022.

Target price is $13.30 Current Price is $10.63 Difference: $2.67
If TNE meets the Goldman Sachs target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in September.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 15.70 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 1.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.88.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 18.20 cents and EPS of 30.00 cents.
At the last closing share price the estimated dividend yield is 1.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.43.

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

TOY    TOYS 'R' US ANZ LIMITED

Retailing – Overnight Price: $0.09

Shaw and Partners rates ((TOY)) as Initiation of coverage with Buy (1) –

Shaw and Partners initiates coverage on Toys 'R' Us ANZ, noting the company is Australia's leader in the fast-growing online toy, hobby and baby segment with 191,000 active customers.

With Australia's toy and baby market value estimated at $6.3bn, Toys 'R' Us ANZ is targeting 5% market share in the medium-term, compared to its current 1.5% penetration, equating to more than $300m in revenue.

Shaw and Partners notes the imminent relaunch of Toys“R”Us and Babies“R”Us in the UK, one of the most advanced e-commerce markets in Europe presents a huge opportunity to the company.

60% of toy sales in the UK were made through e-commerce channels in 2021, with e-commerce expected to account for 35% of all retail sales by 2025.

The broker initiates with a Buy rating and a target price of $0.20.

This report was published on May 26, 2022.

Target price is $0.20 Current Price is $0.09 Difference: $0.11
If TOY meets the Shaw and Partners target it will return approximately 122% (excluding dividends, fees and charges).
The company's fiscal year ends in July.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.86.

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

VHT    VOLPARA HEALTH TECHNOLOGIES LIMITED

Medical Equipment & Devices – Overnight Price: $0.77

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

Volpara Health Technologies' FY22 full-year result slightly outpaced Bell Potter and sharply outpaced consensus, thanks in part to the CRA acquisition.

The loss at the earnings level tightened 4% year on year, notes the broker. Bell Potter suspects organic growth was soft – possibly 10% of the previous year's subscription revenue.

But the target spies plenty of low-hanging fruit on hand for the new CEO. Buy rating retained. Target price slips to $1.23 from $1.30.

This report was published on May 27, 2022.

Target price is $1.23 Current Price is $0.77 Difference: $0.46
If VHT meets the Bell Potter target it will return approximately 60% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 4.79 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.07.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 3.48 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.15.

This company reports in NZD. 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

WBC    WESTPAC BANKING CORPORATION

Banks – Overnight Price: $24.10

Goldman Sachs rates ((WBC)) as Neutral (3) –

Westpac has entered into a Heads of Agreement to merge BT Fund Management's personal and corporate super funds with Mercer Super Trust.

It has also agreed to sell its Advance Asset Management business to Mercer Australia. 

Goldman Sachs expects both deals to be finalised in the first half of FY23 and expects the BT deal will result in a small loss, while Advance will come at a profit, yielding a net gain of $225m after tax.

Strategically, it aligns with the bank's goal of simplification, says the broker, and more asset sales are on the drawing board.

Transaction and separation costs of -$80m are expected to be expensed in the September half as a notable item, says the broker.

Neutral rating and $27.29 target price are retained.

This report was published on May 26, 2022.

Target price is $27.29 Current Price is $24.10 Difference: $3.19
If WBC meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $25.49, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 163.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.0, implying annual growth of 4.4%.
Current consensus DPS estimate is 121.1, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 15.4.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 178.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 188.3, implying annual growth of 20.7%.
Current consensus DPS estimate is 136.1, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 12.8.

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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