Australian Broker Call *Extra* Edition – Mar 18, 2024

This story features 29METALS LIMITED, and other companies. For more info SHARE ANALYSIS: 29M

An additional news report on the recommendation, valuation, forecast and opinion changes and updates for ASX-listed equities.

In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArena has now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listed stocks, also enlarging the number of stocks that make up the FNArena universe.

One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availability of suitable quality content. As such, the *Extra* Edition tries to build a bridge between daily updates via the Australian Broker Call Report and ad hoc news stories, that are not always timely for investors hungry for the next information update.

Investors using the *Extra* Edition as a source of input for their own share market research should thus take into account that information after publication may not be up to date, or yet awaiting another update by FNArena's team of journalists.

Similar to The Australian Broker Call Report, this *Extra* Edition includes concise but limited reviews of research recently published by Stockbrokers and other experts, which should be considered as information concerning likely market behaviour rather than advice on the securities mentioned. Do not act on the contents of this Report without first reading the important information included at the end of this Report.

The Australian Broker Call *Extra* Edition is a summary that has been prepared independently of the sources identified. Readers will check the full text of the recommendations and consult a Licenced Advisor before making any investment decision.

The copyright of this Report is owned by the publisher. Readers will not copy, forward or disseminate this Report to any other person. For more vital information about the sources included, see the bottom of this Report.

COMPANIES DISCUSSED IN THIS ISSUE

Click on a symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)

29M   ADA   ASB   CVW   DDR   FCL   GNG   MAQ   NCK   OBM   PNR   QIP   RDY   SFR   SMP   SPZ   THL   TLX  

29M    29METALS LIMITED

Copper – Overnight Price: $0.49

Jarden rates ((29M)) as Downgrade to Neutral from Overweight (3) –

As per Jarden, persistent liquidity concerns have seen the broker downgrade its rating on 29Metals. While the stock has rallied more than 50% since reporting on its full year in late February, the broker expects this will provide shareholders little consolation. 

The company has announced a new CEO, to commence from the start of May, and while the new hire seems a good fit, with more than 25 years of experience in the Australian mining industry, Jarden warns it could signal a 'clearing of the decks'.

The broker expects restitution of an appropriate capital structure and lower operating costs will be a priority. 

The rating is downgraded to Neutral from Overweight and the target price of 38 cents is retained.

This report was published on March 7, 2024.

Target price is $0.38 Current Price is $0.49 Difference: minus $0.115 (current price is over target).
If 29M meets the Jarden target it will return approximately minus 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $0.41, suggesting downside of -16.5%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -12.6, 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 FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 14.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.1, 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 23.6.

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

ADA    ADACEL TECHNOLOGIES LIMITED

Software & Services – Overnight Price: $0.69

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

While 1H results for Adacel Technologies (on February 19) were below expectations, Taylor Collison suggests the subsequent share price fall presents an opportunity for investors.

The broker points out strategic contract wins announced by the company will be cash generative and enable dividends to recommence in FY25. It's noted management recently signed multiple five-year contracts, with high-quality government or quasi-government entities.

The analyst points out any further contract wins will scale on a largely fixed cost base, with pre-tax profit effectively an after-tax number due to $60m worth of available tax losses.

No interim dividend was declared due to the cash requirements of delivering on contract wins, explains Outperform-rated Taylor Collison. No target price is provided.

This report was published on March 8, 2024.

Current Price is $0.69. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 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 18.17.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 5.20 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 7.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.27.

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

ASB    AUSTAL LIMITED

Commercial Services & Supplies – Overnight Price: $2.14

Petra Capital rates ((ASB)) as Buy (1) –

Austal has confirmed its intention to increase capacity and operating efficiencies at its Alabama shipyard, following recent strong growth in the company's order book. 

As per Petra Capital, the order book increase is allowing the company to shift focus from contract tendering and to delivering contracts at its target earnings margin of 8-10%.

The company has outlined capital expenditure needs as an operational challenge to be resolved, and Petra Capital notes US capital expenditure could total -$100-300m.

The Buy rating and target price of $3.08 are retained.

This report was published on March 7, 2024.

Target price is $3.08 Current Price is $2.14 Difference: $0.94
If ASB meets the Petra Capital target it will return approximately 44% (excluding dividends, fees and charges).
Current consensus price target is $2.68, suggesting upside of 25.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 7.00 cents and EPS of 12.10 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.7, implying annual growth of N/A.
Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 45.5.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 7.50 cents and EPS of 11.10 cents.
At the last closing share price the estimated dividend yield is 3.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.3, implying annual growth of 161.7%.
Current consensus DPS estimate is 3.3, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 17.4.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CVW    CLEARVIEW WEALTH LIMITED

Insurance – Overnight Price: $0.58

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

Taylor Collison highlights shares of Clearview Wealth continue to trade at a now widening discount to embedded value despite new business market share rising to 10.9% from 9.2%. An attractive dividend yield is also noted. 

The broker expects ongoing market share wins now that the company is fully focused on life insurance and given the industry is now
‘rebased’ following the Hayne Royal Commission.

Taylor Collison retains its Outperform rating and has increased its target to 92c.

This report was published on March 8, 2024.

Target price is $0.92 Current Price is $0.58 Difference: $0.34
If CVW meets the Taylor Collison target it will return approximately 59% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 1.50 cents and EPS of 5.40 cents.
At the last closing share price the estimated dividend yield is 2.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.74.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 3.00 cents and EPS of 6.60 cents.
At the last closing share price the estimated dividend yield is 5.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.79.

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

DDR    DICKER DATA LIMITED

Hardware & Equipment – Overnight Price: $11.03

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

FY23 results on February 27 for Dicker Data were "solid", according to Goldman Sachs, with earnings a slight beat and a higher gross margin thanks to an improving mix.

While PC sales declined, revenue growth was supported by vendor and new customer additions, along with strong Networking sales, explains the analyst.

The broker highlights the 10% FY23 growth for Software, which provides a defensive, recurring revenue stream to balance the cyclical nature of the Hardware business.

Management expects a recovery in PC sales through 2024 as well as an ongoing ramp-up in the acquired Dicker Access and Surveillance (DAS) business.

The target rises to $10.50 from $10.20 and the Sell rating remains.

This report was published on March 11, 2024.

Target price is $10.50 Current Price is $11.03 Difference: minus $0.53 (current price is over target).
If DDR meets the Goldman Sachs target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $12.80, suggesting upside of 16.0%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 49.30 cents and EPS of 50.80 cents.
At the last closing share price the estimated dividend yield is 4.47%.
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 50.5, implying annual growth of 10.8%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 21.8.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 54.50 cents and EPS of 56.20 cents.
At the last closing share price the estimated dividend yield is 4.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.5, implying annual growth of 11.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 19.5.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

FCL    FINEOS CORPORATION HOLDINGS PLC

Cloud services – Overnight Price: $1.65

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

Fineos Corp's FY23 result on February 21 revealed misses for annual recurring revenue (ARR) and earnings (EBITDA) against Goldman Sachs forecasts of -7% and -20%, respectively.

The broker suggests the main negative of the result was churn in the Limelight business, which was acquired in 2020. It's also felt the outlook for Subscription revenue growth may be under question given ARR is a leading indicator of performance.

A further surprise for the analyst was a lengthening in customer sales cycles given the current generally buoyant environment for
US insurers.

The target falls to $1.95 from $2.20 and the Neutral rating remains.

This report was published on March 11, 2024.

Target price is $1.95 Current Price is $1.65 Difference: $0.305
If FCL meets the Goldman Sachs target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 11.21 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.68.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 5.11 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.20.

This company reports in EUR. 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

GNG    GR ENGINEERING SERVICES LIMITED

Mining Sector Contracting – Overnight Price: $2.25

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

Harking back to 1H results for GR Engineering Services on February 22, Taylor Collison notes revenue missed expectation though lumpy revenue is to be expected from a contractor. Second half revenues are expected to be higher.

The broker notes profit margins of 7.6% significantly exceeded the previous corresponding period due to high utilisation rates, while contracts performed to expectations.

Management continues to see a historically high level of study work available.

The Outperform rating and target price of $2.52 are retained.

This report was published on March 8, 2024.

Target price is $2.52 Current Price is $2.25 Difference: $0.27
If GNG meets the Taylor Collison target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 19.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 8.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.25.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 20.00 cents and EPS of 22.20 cents.
At the last closing share price the estimated dividend yield is 8.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.14.

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

MAQ    MACQUARIE TECHNOLOGY GROUP LIMITED

Telecommunication – Overnight Price: $79.00

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

Macquarie Technology's 1H results on February 28 were better than Goldman Sachs expected with free cash flow (FCF) of $31m compared to the $4m anticipated, due to the timing of capex for IC3W.

Data Centres are in a holding pattern until IC3W comes online during FY27, notes the broker, with management noting construction is expected to be completed by the 3Q of 2026.

The broker remains confident around the growth outlook for the cloud services and government (CS&G) segment given its positioning to benefit from a focus by government on cybersecurity and enterprise cloud migrations.

Goldman's target rises to $93 from $82.10 and the Buy rating is maintained.

This report was published on March 11, 2024.

Target price is $93.00 Current Price is $79.00 Difference: $14
If MAQ meets the Goldman Sachs target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 135.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 58.30.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 159.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.69.

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

NCK    NICK SCALI LIMITED

Furniture & Renovation – Overnight Price: $14.54

Wilsons rates ((NCK)) as Market Weight (3) –

With the Plush acquisition successfully integrated and cost out synergies and margin expansion achieved within two years, Wilsons expects the focus for Nick Scali will now turn to offshore acquisition opportunities. 

The broker particularly sees merit in replicating the success of its Plush purchase with a UK-based acquisition.

While there are similarities between the Australian and UK sofa customer, Wilsons notes the latter typically spends -19.1% less than its Australian counterpart. It also highlights a higher online penetration in the UK, but does not expect these nuances to act as a barrier.

The Overweight rating is retained and the target price increases to $16.20 from $15.40.

This report was published on March 12, 2024.

Target price is $16.20 Current Price is $14.54 Difference: $1.66
If NCK meets the Wilsons target it will return approximately 11% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 65.60 cents and EPS of 99.40 cents.
At the last closing share price the estimated dividend yield is 4.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.63.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 71.00 cents and EPS of 101.50 cents.
At the last closing share price the estimated dividend yield is 4.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.33.

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

OBM    ORA BANDA MINING LIMITED

Gold & Silver – Overnight Price: $0.26

Moelis rates ((OBM)) as Initiation of coverage with Buy (1) –

Moelis has initiated coverage on emerging domestic gold producer Ora Banda Mining. The company owns and operates the Davyhurst processing facility, an asset the broker notes has previously struggled to transition to a steady state operation after start up.

Moelis believes Ora Banda Mining's ownership marks a significant strategic shift for the asset, with the company transitioning underground, leading to lower mined tonnes and higher processed grades, and subsequent lower cash costs and stronger cashflow.

The broker considers the operational transition straightforward. The broker initiates coverage with a Buy rating and a target price of 35 cents.

This report was published on March 12, 2024.

Target price is $0.35 Current Price is $0.26 Difference: $0.095
If OBM meets the Moelis target it will return approximately 37% (excluding dividends, fees and charges).

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

PNR    PANTORO LIMITED

Gold & Silver – Overnight Price: $0.05

Petra Capital rates ((PNR)) as Buy (1) –

Pantoro has moved to a simplified mining strategy, as per Petra Capital, whereby the company is focusing on exploiting the high grade mineralisation at the Norseman mine from underground.  The broker feels this approach better suits the style of deposit.

The broker believes Pantoro will increase its milled grades above 3 grams per tonne, driving output above 100,000 ounces per annum from FY25, given the intended rapid development of Scotia underground and grades from the OK underground. 

The Buy rating and target price of 13 cents is retained.

This report was published on March 8, 2024.

Target price is $0.13 Current Price is $0.05 Difference: $0.076
If PNR meets the Petra Capital target it will return approximately 141% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.00.

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

QIP    QANTM INTELLECTUAL PROPERTY LIMITED

Legal – Overnight Price: $1.52

Petra Capital rates ((QIP)) as Buy (1) –

Qantm Intellectual Property has recently confirmed receival of a takeover bid from Rouse International. Petra Capital finds Rouse International well capitalised and seeking transactions that will expand its Asia Pacific footprint.

While the broker feels the deal makes sense given the underlying quality of Qantm Intellectual Property's assets and shareholder pressure given stock underperformance in recent years, it notes there is no guarantee the deal will progress. 

The Buy rating and target price of $1.76 are retained.

This report was published on March 8, 2024.

Target price is $1.76 Current Price is $1.52 Difference: $0.235
If QIP meets the Petra Capital target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 7.50 cents and EPS of 12.80 cents.
At the last closing share price the estimated dividend yield is 4.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.91.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 8.40 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 5.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.38.

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: $3.37

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

First half results (released on February 27) for ReadyTech Holdings revealed a revenue miss against the forecast by Goldman Sachs, driven by lower-margin implementation revenue. More positively, subscriptions grew a healthily 17%, notes the analyst.

Largely as a result of negative leverage from the revenue implementation miss, margins were slightly softer, explains the broker.

Management lowered FY24 revenue guidance to low-double digit growth from the mid-teens.

Given additional signs of management's execution on the Enterprise growth strategy, Goldman Sachs has confidence ReadyTech can sustain its mid-teens subscription growth cadence.

The target falls to $4.25 from $4.50 and the Buy rating is maintained.

This report was published on March 11, 2024.

Target price is $4.25 Current Price is $3.37 Difference: $0.88
If RDY meets the Goldman Sachs target it will return approximately 26% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 9.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.85.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 13.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.92.

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

SFR    SANDFIRE RESOURCES LIMITED

Copper – Overnight Price: $8.39

Jarden rates ((SFR)) as Downgrade to Neutral from Overweight (3) –

Despite its newly lowered rating on the stock, Jarden continues to see Sandfire Resources as a core holding in the resources sector. The broker considers the outlook for copper pricing positive, with material supply disruptions late last year tightening concentrate supply. 

Following the Motheo growth project, Jarden expects Sandfire Resources can deliver 28% copper production growth over the next two years to around 108,000 tonnes of copper.

It also anticipates copper pricing lifting as high as US$4.50 per pound in FY26, with a long-term price expectation of US$3.50 per pound.

The rating is downgraded to Neutral from Overweight and the target price of $6.50 is retained.

This report was published on March 7, 2024.

Target price is $6.50 Current Price is $8.39 Difference: minus $1.89 (current price is over target).
If SFR meets the Jarden target it will return approximately minus 23% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $7.45, suggesting downside of -11.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 10.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 83.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -6.3, implying annual growth of N/A.
Current consensus DPS estimate is 1.5, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 7.60 cents and EPS of 51.35 cents.
At the last closing share price the estimated dividend yield is 0.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.6, implying annual growth of N/A.
Current consensus DPS estimate is 7.6, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 22.3.

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

SMP    SMARTPAY HOLDINGS LIMITED

Business & Consumer Credit – Overnight Price: $1.38

Wilsons rates ((SMP)) as Initiation of coverage with Overweight (1) –

Wilsons has confidence in the medium-term earnings outlook for SmartPay, based on the opportunity in New Zealand, and initiates coverage with an Overweight rating and $1.87 target.

The opportunity pertains to the mid-2025 launch of SmartPay's NZ Acquiring product. The analysts believe this product will prove to be a supplementary growth driver to gross profit growth rates already in excess of 20% per annum.

That being said, Wilsons stresses Australia will remain the driver of near-term earnings, and domestic growth rates may ease given the increased commoditisation of Zero-Cost EFTPOS by other payment service providers (PSPs).

Moreover, competition is increasing with other vertically-integrated point of sale (POS) providers now offering payments, explains the broker.

This report was published on March 11, 2024.

Target price is $1.87 Current Price is $1.38 Difference: $0.495
If SMP meets the Wilsons target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 3.43 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.08.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 4.82 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.52.

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

SPZ    SMART PARKING LIMITED

Hardware & Equipment – Overnight Price: $0.42

Petra Capital rates ((SPZ)) as Buy (1) –

Smart Parking has acquired parking management contracts and assets from Local Parking Security, in a move Petra Capital feels is highly encouraging for Smart Parking against the backdrop of uncertainty driven by the current UK private operator parking rates review.

The purchase, which came at a cost of -$5.8m, adds 126 sites to the company's holdings, bringing total sites to 1,369 and, the broker believes, adds credibility to guidance for 1,500 sites by the end of the calendar year. 

The Buy rating is retained and the target price increases to 64 cents from 58 cents.

This report was published on March 6, 2024.

Target price is $0.64 Current Price is $0.42 Difference: $0.22
If SPZ meets the Petra Capital target it will return approximately 52% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 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 24.71.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.67.

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

THL    TOURISM HOLDINGS LIMITED

Travel, Leisure & Tourism – Overnight Price: $3.08

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

Tourism Holdings Rentals has announced the divestment of Camplify Holdings stake for a proceed of $19.2m, explaining a renewed focus on returns from funds employed was behind the decision to divest its shares in the as yet unprofitable company.

Wilsons considers the divestment the right move for Tourism Holdings Rentals, and the broker's forecasts are essentially unchanged by the divestment. The company noted it continues to see the peer-to-peer RV industry as valuable, and it remains open to re-entering the sector.

The Overweight rating is retained and the target price decreases to $4.03 from $4.05.

This report was published on March 7, 2024.

Target price is $4.03 Current Price is $3.08 Difference: $0.95
If THL meets the Wilsons target it will return approximately 31% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 14.84 cents and EPS of 32.36 cents.
At the last closing share price the estimated dividend yield is 4.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.52.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 17.06 cents and EPS of 35.98 cents.
At the last closing share price the estimated dividend yield is 5.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.56.

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

TLX    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $12.08

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

Wilsons increases its target for Telix Pharmaceuticals by 15% to $14.28 after raising gross margin assumptions for Illuccix and lifting the peak sales outlook for TLX591. Overweight.

Regarding Illuccix, the broker sees potential pricing reforms, product life cycle initiatives (ILL2CCIX) and tailwinds for sustained prostate-specific membrane antigen (PSMA) positron emission tomography (PET)/CT.

For 2024, the analysts suggest more valuation potential resides in the TLX591 product than anywhere else.

Wilsons especially likes the proposed acquisition of ARTMS, a manufacturing group based in Canada with capabilities across radionuclides, which is the first step towards isotope self-sufficiency for Telix in North America.

This report was published on March 17, 2024.

Target price is $14.28 Current Price is $12.08 Difference: $2.2
If TLX meets the Wilsons target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 8.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 140.47.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 20.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 59.80.

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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