Australian Broker Call *Extra* Edition – Jun 21, 2022

This story features AUB GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: AUB

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)

ASB   AUB   BUB   GDG   GUD   IMM   LDX   NIC   PAR   RDY   SDF  

ASB    AUSTAL LIMITED

Commercial Services & Supplies – Overnight Price: $1.82

Shaw and Partners – Cessation of coverage

This report was published on June 20, 2022.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 8.00 cents and EPS of 19.40 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of -11.8%.
Current consensus DPS estimate is 8.3, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 9.1.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 8.00 cents and EPS of 16.40 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.6, implying annual growth of -16.6%.
Current consensus DPS estimate is 8.8, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 11.0.

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

AUB    AUB GROUP LIMITED

Diversified Financials – Overnight Price: $16.42

Jarden rates ((AUB)) as Buy (1) –

AUB Group is now Jarden's preference over Steadfast Group ((SDF)) and insurance brokers are expected to benefit from sustained tailwinds and insulated margins. Moreover, the sell-off in the stock post the Tysers acquisition has extended its underperformance.

With over 85% of the broking gross written premium (GWP) driven by commercial insurance, where revenue is predominantly related to commissions, the outlook for these classes of insurance is key, the broker points out.

In addition to lifting organic GWP growth estimates for FY23, costs are also forecast to grow and the target is lowered to $27.45 from $31.70. By rating maintained.

This report was published on June 17, 2022.

Target price is $27.45 Current Price is $16.42 Difference: $11.03
If AUB meets the Jarden target it will return approximately 67% (excluding dividends, fees and charges).
Current consensus price target is $25.76, suggesting upside of 56.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 59.30 cents and EPS of 95.90 cents.
At the last closing share price the estimated dividend yield is 3.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 91.8, implying annual growth of -1.4%.
Current consensus DPS estimate is 59.0, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 17.9.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 76.20 cents and EPS of 126.70 cents.
At the last closing share price the estimated dividend yield is 4.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 103.7, implying annual growth of 13.0%.
Current consensus DPS estimate is 61.0, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 15.8.

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

BUB    BUBS AUSTRALIA LIMITED

Dairy – Overnight Price: $0.61

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

Updated FY22 guidance has gross revenue forecast to exceed $100m and underlying EBITDA to be at least double the first half. At first glance, the guidance is softer than Bell Potter previously estimated and, therefore, probably includes some conservatism.

In recent weeks Bubs Australia has reached agreements with Walmart, Kroger and Albertsons for additional deliveries of infant formula product into the USA.

While upgrading net revenue forecasts by 6-10%, the broker downgrades margin assumptions, resulting in EBITDA downgrades of -19%. A Speculative Hold rating is maintained. Target is $0.75.

This report was published on June 17, 2022.

Target price is $0.75 Current Price is $0.61 Difference: $0.14
If BUB meets the Bell Potter target it will return approximately 23% (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 0.00 cents.

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 610.00.

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

GDG    GENERATION DEVELOPMENT GROUP LIMITED

Wealth Management & Investments – Overnight Price: $1.26

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

Shaw and Partners initiates coverage of Generation Development with a Buy rating and $1.80 target. The broker notes the company has spent two years developing its lifetime annuity product which was launched in March 2022.

Significant uptake and penetration is expected, given the company's vast adviser base across investment bonds and distinct product advantages, which include greater investment options and higher upfront returns.

The broker also believes the company has the potential to overtake Australian Unity as the number one provider of investment bonds.

This report was published on June 20, 2022.

Target price is $1.80 Current Price is $1.26 Difference: $0.54
If GDG meets the Shaw and Partners target it will return approximately 43% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 2.00 cents and EPS of 1.10 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 114.55.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 2.00 cents and EPS of 1.70 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 74.12.

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

GUD    G.U.D. HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $7.96

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

G.U.D. Holdings recently lowered FY22 earnings guidance by -7%, largely driven by the Auto Pacific business. Constraints on new vehicle supply and timing of new models have led to a slowdown in sales.

Despite the strong new vehicle demand and order books at dealerships, Wilsons is highly aware of the rising risk to consumer discretionary expenditure, although believes this has been excessively discounted in the company's share price.

The Overweight rating is maintained. Target is reduced to $9.70 from $14.90. 

This report was published on June 20, 2022.

Target price is $9.70 Current Price is $7.96 Difference: $1.74
If GUD meets the Wilsons target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $13.34, suggesting upside of 67.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 51.50 cents and EPS of 71.00 cents.
At the last closing share price the estimated dividend yield is 6.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.1, implying annual growth of 7.8%.
Current consensus DPS estimate is 44.2, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 11.4.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 72.00 cents and EPS of 88.50 cents.
At the last closing share price the estimated dividend yield is 9.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 90.6, implying annual growth of 29.2%.
Current consensus DPS estimate is 53.3, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 8.8.

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

IMM    IMMUTEP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.31

Taylor Collison rates ((IMM)) as Outperform (2) –

Immutep has positive data from an expanded TACTI-002 trial in non-small cell lung cancer. The response rate and progression-free survival is supportive of late stage clinical development in this particular setting.

Taylor Collison considers this trial a better option than the proposed phase III trial of efti+chemo in breast cancer. Management will now evaluate the options based on this substantial new data set.

Outperform rating. Valuation is unchanged at $1.31/share, fully diluted.

This report was published on June 10, 2022.

Current Price is $0.31. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY22:

Taylor Collison forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 3.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.16.

Forecast for FY23:

Taylor Collison forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.54.

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

LDX    LUMOS DIAGNOSTICS HOLDINGS LIMITED

Medical Equipment & Devices – Overnight Price: $0.14

Bell Potter rates ((LDX)) as Speculative Buy (1) –

Lumos Diagnostics has been successful in cutting costs in the US, resulting in scaled capacity and personnel and targeting monthly cash burn of less than US$1m by the end of FY22.

An institutional entitlement offer has been completed, raising $8m. The US FDA is also expected to provide an indicative clearance decision within 58 days after the filing of its FebriDX asset for approval on May 9.

Bell Potter maintains a Speculative Buy rating and reduces the target to $0.28 from $0.75. The valuation is driven by discounted cash flow, upwardly adjusted cost of capital as well as the dilutive effect of the new shares, the broker explains.

This report was published on June 17, 2022.

Target price is $0.28 Current Price is $0.14 Difference: $0.14
If LDX meets the Bell Potter target it will return approximately 100% (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 8.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.69.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.41.

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

NIC    NICKEL INDUSTRIES LIMITED

Nickel – Overnight Price: $1.00

Shaw and Partners – Cessation of coverage

This report was published on June 20, 2022.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 11.54 cents and EPS of 15.39 cents.
At the last closing share price the estimated dividend yield is 11.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.6, implying annual growth of N/A.
Current consensus DPS estimate is 6.4, implying a prospective dividend yield of 6.4%.
Current consensus EPS estimate suggests the PER is 7.4.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 15.25 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 15.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.9, implying annual growth of 24.3%.
Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 7.9%.
Current consensus EPS estimate suggests the PER is 5.9.

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

PAR    PARADIGM BIOPHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.98

Bell Potter rates ((PAR)) as Speculative Buy (1) –

Paradigms Biopharmaceuticals is scheduled to release the first major data since its headline data from the first randomised control trial of Zilosul almost 4 years ago.

Bell Potter suggests data to emerge over the next quarter will be crucial to the viability of the current phase 3 program which is now recruiting in the US, as well as to inform future studies.

In light of the ongoing correction in the biotechnology sector, the broker reduces the target by -9%, to $1.90 from $2.10. Speculative Buy retained.

This report was published on June 17, 2022.

Target price is $1.90 Current Price is $0.98 Difference: $0.92
If PAR meets the Bell Potter target it will return approximately 94% (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 24.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.05.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 22.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.32.

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

RDY    READYTECH HOLDINGS LIMITED

Software & Services – Overnight Price: $2.74

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

ReadyTech will acquire IT Vision, a software provider to Australian local government, for up to $54.6m. The cash portion of the payment will be funded by debt.

Jarden considers the transaction "strategically sound" as it expands the local government market share to 50-55% and provides cross selling opportunities with the Open Office business.

The broker increases revenue forecasts by 15% for FY23 and FY24 while margin forecasts declined by -260 basis points for FY23 and -210 basis points for FY24, stemming from the mix shift and the addition of the lower-margin IT Vision business.

Overweight retained. Target is lowered to $4.02 from $4.37.

This report was published on June 17, 2022.

Target price is $4.02 Current Price is $2.74 Difference: $1.28
If RDY meets the Jarden target it will return approximately 47% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 0.00 cents and EPS of 13.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.15.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 16.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.21.

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

SDF    STEADFAST GROUP LIMITED

Insurance – Overnight Price: $4.69

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

Steadfast Group appears well-positioned for high single-digit organic growth into FY23 yet the value upside has diverged, Jarden asserts, and AUB Group ((AUB)) is now preferred among insurance brokers.

With over 85% of the broking gross written premium (GWP) driven by commercial insurance, where revenue is predominantly related to commissions, the outlook for these classes of insurance is key, the broker points out.

In addition to lifting organic GWP growth estimates for FY23, costs are also forecast to grow. All up, the broker lowers the target to $5.10 from $5.25 and maintains an Overweight rating.

This report was published on June 17, 2022.

Target price is $5.10 Current Price is $4.69 Difference: $0.41
If SDF meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $5.90, suggesting upside of 25.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 13.10 cents and EPS of 21.60 cents.
At the last closing share price the estimated dividend yield is 2.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of 25.1%.
Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 22.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 14.90 cents and EPS of 23.40 cents.
At the last closing share price the estimated dividend yield is 3.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.3, implying annual growth of 7.7%.
Current consensus DPS estimate is 14.0, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 21.0.

Market Sentiment: 1.0
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.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

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