Australian Broker Call *Extra* Edition – Jun 28, 2022

This story features PENTANET LIMITED, and other companies. For more info SHARE ANALYSIS: 5GG

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)

5GG   A1M   FBU   GDA   IGL   MCR (2)   NAB   NUF   QAN   SEK  

5GG    PENTANET LIMITED

Telecommunication – Overnight Price: $0.27

Shaw and Partners rates ((5GG)) as Buy (1) –

Pentanet's Perth-based next-gen high-speed wireless network neXus has launched, with successful rollout key to Shaw and Partners' valuation of the company. The broker notes the network should provide support to additional customers in under-served areas.

Shaw and Partners highlights the commercial launch is in line with the company's timeframe,  and that the network provides a clear speed advantage over average fixed broadband speeds with neXus recording average maximum speeds of 607mbps download and 513mbps upload during beta testing.

The Buy rating and target price of $0.40 are retained.

This report was published on June 27, 2022.

Target price is $0.40 Current Price is $0.27 Difference: $0.13
If 5GG meets the Shaw and Partners target it will return approximately 48% (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 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.27.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.29.

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

A1M    AIC MINES LIMITED

Gold & Silver – Overnight Price: $0.56

Shaw and Partners rates ((A1M)) as Buy (1) –

Latest reports from AIC Mines' copper project confirm resource definition drilling continues to intersect high grade mineralisation 75m below the current lowest mining level in the Eloise Deeps, but Shaw and Partners notes converting drilling into reserves is some way away.

The broker highlights the Deeps hold higher grade mineralisation than other areas of the mine, and are key to optimising the asset, but drilling to date supports an ongoing mine life. 

The Buy rating and target price fo $0.73 are retained.

This report was published on June 27, 2022.

Target price is $0.73 Current Price is $0.56 Difference: $0.17
If A1M meets the Shaw and Partners target it will return approximately 30% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 12.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.55.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 7.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.18.

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

FBU    FLETCHER BUILDING LIMITED

Building Products & Services – Overnight Price: $4.67

JP Morgan rates ((FBU)) as Neutral (3) –

During an investor day, Fletcher Building maintained guidance for FY22 earnings (EBIT) of NZ$750m. This outcome was in part enabled by an ability to maintain price in the face of persistent cost inflation since February, explains JP Morgan.

Management was also able to provide broad guidance into FY23, with elevated activity levels for another 12-18 months expected as industry capacity constraints are likely to remain.

FY23 guidance is for flat sales and a further 50 basis points margin expansion over the current 9.5% run rate.

JP Morgan maintains its Neutral rating and NZ$6.50 target price.

This report was published on June 24, 2022.

Current Price is $4.67. Target price not assessed.
Current consensus price target is $7.50, suggesting upside of 60.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 37.98 cents and EPS of 52.89 cents.
At the last closing share price the estimated dividend yield is 8.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.5, implying annual growth of N/A.
Current consensus DPS estimate is 35.8, implying a prospective dividend yield of 7.7%.
Current consensus EPS estimate suggests the PER is 9.2.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 38.45 cents and EPS of 56.08 cents.
At the last closing share price the estimated dividend yield is 8.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.9, implying annual growth of 8.7%.
Current consensus DPS estimate is 38.3, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 8.5.

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

GDA    GOOD DRINKS AUSTRALIA LIMITED

Food, Beverages & Tobacco – Overnight Price: $0.72

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

Back on June 9, Taylor Collison lifted its price target for Good Drinks Australia to $1.12 from $1.02. This followed the announcement of Australian distribution agreements with Magners Irish Cider and a more material agreement with Molson Coors.

The broker increases FY23 and FY24 earnings (EBITDA) forecasts by 10% and 23% as a result of the agreements though lowers its FY22 forecast by -15% due to freight and raw material price increases.

The increased volumes via the distribution agreements fast-tracks scale and increases diversification, without altering Good Drinks Australia's core brand strategy, explains Taylor Collison. The Outperform rating is maintained.

This report was published on June 9, 2022.

Target price is $1.12 Current Price is $0.72 Difference: $0.4
If GDA meets the Taylor Collison target it will return approximately 56% (excluding dividends, fees and charges).
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 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.35.

Forecast for FY23:

Taylor Collison forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.00.

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

IGL    IVE GROUP LIMITED

Media – Overnight Price: $1.76

Shaw and Partners rates ((IGL)) as Buy (1) –

A trading update by IVE Group that included underlying earnings (EBITDA) guidance of $98m for FY22 was in-line with Shaw and Partners' expectation. Revenue guidance exceeded expectation, likely driven by market share gains.

The broker likes the strong bounce back for FY22 in the most difficult trading environment the group is likely to experience. A final dividend of around 6.5-8.5cps is now expected, with potential for a further share buy-back.

The company has returned to pre-covid profitability with an improved competitive position, according to the analyst, and it's felt the trading update is a key de-risking event.

The target price falls to $2.34 from $2.45, while the Buy rating is retained.

This report was published on June 23, 2022.

Target price is $2.34 Current Price is $1.76 Difference: $0.58
If IGL meets the Shaw and Partners target it will return approximately 33% (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 15.20 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 8.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.65.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 16.40 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 9.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.77.

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

MCR    MINCOR RESOURCES NL

Nickel – Overnight Price: $1.67

Bell Potter rates ((MCR)) as Upgrade to Buy from Speculative Hold (1) –

Bell Potter considers Mincor Resources is well positioned to benefit from rising nickel demand, given near-term production, existing resources and the potential of its exploration portfolio. The rating is raised to Buy from Speculative Hold.

The target price falls by -15% to $2.00 largely due to a reduced spot nickel price, explains the broker.

The Cassini nickel project was delivered for a peak funding outlay of -$98m, lower than the previous estimate of -$107m, notes the analyst. Meanwhile, $25m has been received as first payment for FY22 from nickel concentrate sales. 

This report was published on June 27, 2022.

Target price is $2.00 Current Price is $1.67 Difference: $0.33
If MCR meets the Bell Potter target it will return approximately 20% (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 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 79.52.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 15.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.84.

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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Shaw and Partners rates ((MCR)) as Upgrade to Buy from Hold (1) –

Shaw and Partners upgrades its rating for Mincor Resources to Buy from Hold.

After successfully bringing the Cassini nickel mine (in WA) into production (under budget), the broker highlights the first payment was received from BHP Group ((BHP)) for ore delivered to the Kambalda concentrator this quarter.

The analyst also points to excellent results from the company's exploration program, which is expected to further accelerate in FY23.

The target price is increased to $2.05 from $1.58 after Shaw and Partners includes $341m in value from potential resources.

This report was published on June 24, 2022.

Target price is $2.05 Current Price is $1.67 Difference: $0.38
If MCR meets the Shaw and Partners target it will return approximately 23% (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 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 1670.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 3.00 cents and EPS of 20.90 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.99.

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

NAB    NATIONAL AUSTRALIA BANK LIMITED

Banks – Overnight Price: $27.93

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

Goldman Sachs lifts its FY22-24 EPS estimates for National Australia Bank by 0.6%, 2% and 2.3%, respectively, following the completion
of the acquisition of Citigroup’s Australian consumer business (originally announced last August).

The broker assumes the bank will achieve 80% of its yearly targeted pre-tax annual cost synergies of $130m over three years.

The Buy rating is maintained and the target rises to $34.26 from $34.17.

This report was published on June 27, 2022.

Target price is $34.26 Current Price is $27.93 Difference: $6.33
If NAB meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $31.82, suggesting upside of 13.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 151.00 cents and EPS of 221.30 cents.
At the last closing share price the estimated dividend yield is 5.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 212.9, implying annual growth of 10.3%.
Current consensus DPS estimate is 148.1, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 13.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 168.00 cents and EPS of 238.20 cents.
At the last closing share price the estimated dividend yield is 6.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 235.1, implying annual growth of 10.4%.
Current consensus DPS estimate is 162.1, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 11.9.

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

NUF    NUFARM LIMITED

Agriculture – Overnight Price: $5.18

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

Following a material derating in global crop protection and domestic peer trading multiples in recent weeks, Bell Potter sees Nufarm as better placed than peers to navigate a normalisation in Australian crop conditions,

The broker holds this view as sub-optimal conditions in North America and the Mediterranean provide a buffer for FY23, and new seed revenue streams (carinata and omega-3) will emerge in FY23-24.

The broker's target price falls to $6.65 from $7.85 to align with the material compression in global peer trading multiples. The Buy rating is maintained.

This report was published on June 27, 2022.

Target price is $6.65 Current Price is $5.18 Difference: $1.47
If NUF meets the Bell Potter target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $6.87, suggesting upside of 32.7%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 8.00 cents and EPS of 32.20 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.1, implying annual growth of 137.5%.
Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 9.00 cents and EPS of 36.40 cents.
At the last closing share price the estimated dividend yield is 1.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.9, implying annual growth of -11.6%.
Current consensus DPS estimate is 9.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 16.2.

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

QAN    QANTAS AIRWAYS LIMITED

Transportation & Logistics – Overnight Price: $4.64

Jarden rates ((QAN)) as Buy (1) –

Following a trading update by Qantas Airways that pointed to stronger demand, lower capacity (due to fuel costs) and less net debt, Jarden maintains its Buy rating and increases its target price to $6.40 from $6.30.

Management maintained 2H earnings (EBITDA) guidance of $450-550m, which suggests to the broker the underlying performance has been stronger than expected through the half. It's felt yield improvement and capacity rationalisation will offset higher fuel costs.

However, the analyst awaits company guidance on fuel costs (the effectiveness of hedging and offsets is unclear), believing the consensus forecast for FY23 is too low, which presents a (positive) near-term share price risk.

This report was published on June 27, 2022.

Target price is $6.40 Current Price is $4.64 Difference: $1.76
If QAN meets the Jarden target it will return approximately 38% (excluding dividends, fees and charges).
Current consensus price target is $6.16, suggesting upside of 32.8%(ex-dividends)
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 minus 72.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -66.2, 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 N/A.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 8.30 cents and EPS of 21.20 cents.
At the last closing share price the estimated dividend yield is 1.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.3, implying annual growth of N/A.
Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 13.1.

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

SEK    SEEK LIMITED

Jobs & Skilled Labour Services – Overnight Price: $22.23

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

May labour data show a further increase in labour mobility and turnover, with the share of employees starting new jobs lifting to around 22% (the highest since 2008).

Jarden considers rising turnover, skilled labour shortages and rising wages are a positive backdrop for Overweight-rated Seek. It's felt the company's variable pricing model will suit the current environment (a tight labour market and hiring taking longer).

No broker update was provided for the target price. As at 21 April the target was $40.80.

This report was published on June 27, 2022.

Target price is $40.80 Current Price is $22.23 Difference: $18.57
If SEK meets the Jarden target it will return approximately 84% (excluding dividends, fees and charges).
Current consensus price target is $31.87, suggesting upside of 43.4%(ex-dividends)

Forecast for FY22:

Current consensus EPS estimate is 70.2, implying annual growth of 101.0%.
Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 31.7.

Forecast for FY23:

Current consensus EPS estimate is 74.2, implying annual growth of 5.7%.
Current consensus DPS estimate is 44.0, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 30.0.

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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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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