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

Broker Rating Changes (Post Thursday Last Week)

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INSURANCE AUSTRALIA GROUP LIMITED ((IAG)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0

Jarden sees growing potential for positive earnings surprises for General Insurers on the ASX.

After upgrading Insurance Australia Group to Buy from Overweight, the broker's order of preference becomes QBE Insurance (leading on gross written premium growth), then Insurance Australia Group followed by Suncorp Group.

Now that there are two purer-play domestic general insurers, following Suncorp Group's yet-to-be-completed Bank sale, Jarden compares Suncorp to Insurance Australia Group.

The broker prefers Insurance Australia Group for its increasing optionality and because it is trading at a greater discount to historical valuation multiples.

On a relative basis, the analysts see greater upside risk to Insurance Australia Group's underlying insurance trading ratio (ITR), which is set to eclipse management's 15% target from the 2H of FY24.

Jarden also see scopes for $400m per year of buybacks over FY25-FY27. Target $6.95.

Downgrade

29METALS LIMITED ((29M)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden downgrades its rating for 29Metals to Underweight from Neutral and lowers the target to 30c from 38c following suspension of  operations at Capricorn Copper due to heavy rainfall in the March quarter.

Capricorn Copper's earnings forecasts are largely removed from the broker's financial model and a $50m valuation is now assumed.

With the new Managing Director Mr Palmer commencing on May 1, the analysts are hopeful of a full reset on the Capricorn asset.

Jarden continues to believe additional liquidity will be required with a forecast for the existing cash balance to be depleted by the end of 2024. A $60m liquidity event is assumed.

MMA OFFSHORE LIMITED ((MRM)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0

MMA Offshore has entered a binding scheme implementation deed with Cyan MMA Holdings for acquisiton of all shares at $2.60 per share.

As per Moelis, the offer reflects a valuation of $1.03bn for the company, representing an 11% premium to the previous closing price.

MMA Offshore's board has unanimously recommended voting in favour of the bid, feeling it offers compelling value. A shareholder vote is expected by mid-July.

The rating is downgraded to Hold from Buy and the target price increases to $2.60 from $2.30.

Order	Company	New Rating	Old Rating	Broker
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1	INSURANCE AUSTRALIA GROUP LIMITED	Buy	Buy	Jarden
Downgrade
2	29METALS LIMITED	Sell	Neutral	Jarden
3	MMA OFFSHORE LIMITED	Neutral	Buy	Moelis

Price Target Changes (Post Thursday Last Week)

Company		Last Price	Broker	New Target	Old Target	Change
29M	29Metals	$0.36	Jarden	0.30	0.38	-21.05%
AGY	Argosy Minerals	$0.14	Petra Capital	0.32	0.63	-49.21%
AKG	Academies Australasia	$0.20	Taylor Collison	0.35	0.40	-12.50%
ALK	Alkane Resources	$0.61	Petra Capital	1.02	1.05	-2.86%
ALQ	ALS Ltd	$13.18	Goldman Sachs	13.60	13.70	-0.73%
			Jarden	13.70	13.40	2.24%
APM	APM Human Services International	$1.63	Canaccord Genuity	2.00	1.35	48.15%
AQZ	Alliance Aviation Services	$2.90	Wilsons	4.35	4.14	5.07%
ARL	Ardea Resources	$0.75	Petra Capital	0.74	2.56	-71.09%
ASM	Australian Strategic Materials	$1.38	Petra Capital	1.54	1.94	-20.62%
BGL	Bellevue Gold	$1.87	Canaccord Genuity	2.00	1.80	11.11%
BKT	Black Rock Mining	$0.07	Petra Capital	0.16	0.35	-54.29%
BKW	Brickworks	$28.29	Jarden	28.50	28.75	-0.87%
BLD	Boral	$6.12	Jarden	5.90	5.80	1.72%
BRG	Breville Group	$27.50	Wilsons	31.30	24.90	25.70%
CU6	Clarity Pharmaceuticals	$2.63	Wilsons	3.05	2.78	9.71%
IAG	Insurance Australia Group	$6.44	Jarden	6.95	6.40	8.59%
IDX	Integral Diagnostics	$2.23	Jarden	2.59	2.54	1.97%
IGO	IGO	$7.00	Canaccord Genuity	5.50	6.00	-8.33%
IRE	Iress	$8.29	Wilsons	9.00	8.00	12.50%
KMD	KMD Brands	$0.53	Canaccord Genuity	0.54	0.57	-5.26%
LNW	Light & Wonder	$159.71	Jarden	164.00	161.00	1.86%
MOZ	Mosaic Brands	$0.14	Wilsons	N/A	0.16	-100.00%
MRM	MMA Offshore	$2.61	Moelis	2.60	2.30	13.04%
NHC	New Hope	$4.61	Goldman Sachs	3.70	3.50	5.71%
ORG	Origin Energy	$9.18	Jarden	9.35	9.20	1.63%
PMV	Premier Investments	$32.11	Goldman Sachs	25.10	23.50	6.81%
			Jarden	30.80	24.20	27.27%
			Petra Capital	34.25	29.50	16.10%
PTM	Platinum Asset Management	$1.08	Jarden	1.15	1.06	8.49%
RMD	ResMed	$30.06	Wilsons	32.90	31.28	5.18%
SUN	Suncorp Group	$16.37	Jarden	16.80	15.95	5.33%
WBC	Westpac	$25.91	Goldman Sachs	23.41	23.46	-0.21%
WEB	Webjet	$8.82	Jarden	9.55	8.80	8.52%
			Wilsons	10.13	9.22	9.87%
			Wilsons	9.17	9.22	-0.54%
Company		Last Price	Broker	New Target	Old Target	Change

More Highlights

COI    COMET RIDGE LIMITED

NatGas – Overnight Price: $0.21

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

Petra Capital feels the prospect of a takeover of Comet Ridge is becoming more real given the strategic relevance of the Mahalo Gas project, and the current -32% discount to peer valuation multiples.

This view by the broker follows management's statement of being  in “early-stage discussions” and is “evaluating its strategic and other options, including Mahalo project funding, expanding operations by merging with another entity, or a change of control”.

Santos ((STO)) is a 43% joint venture partner in Mahalo. The Buy rating and 38c target are unchanged.

This report was published on March 22, 2024.

Target price is $0.38 Current Price is $0.21 Difference: $0.17
If COI meets the Petra Capital target it will return approximately 81% (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 minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 35.00.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 52.50.

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

LNW    LIGHT & WONDER INC

Gaming – Overnight Price: $160.50

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

While it's smaller in scale than the Australasian Gaming Expo, Jarden believes the Australasian Hospitality Gaming Expo is a great barometer to check in on gaming suppliers, customers and the latest and greatest of product available.

Based on direct customer feedback and booth attendance levels, Light & Wonder arguably displayed more innovation, positive momentum and scalability than other participants, the broker suggests.

It is clear to Jarden the Australian industry has now moved from an effective monopoly to duopoly status, with Light & Wonder’s renewed game development and cross-channel focus now rivalling Aristocrat Leisure ((ALL)). Overweight retained, target rises to $164 from $161.

This report was published on March 25, 2024.

Target price is $164.00 Current Price is $160.50 Difference: $3.5
If LNW meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
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 436.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.81.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 553.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.02.

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

RKN    RECKON LIMITED

Accountancy – Overnight Price: $0.55

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

Management at Reckon has presented on prospects for the Legal Group, which implied to Petra Capital significant share price upside.

The analyst suggests investors view Reckon's business in two parts: the Business Group as a stable cash flow generator; and the high- growth engine of the Legal Group.

Due to the combined serviceable addressable market (SAM) across Document and Billing Workflows of more than $500m, the broker has greater confidence in its Legal Group revenue forecasts. These estimates increase to $34.5m in FY29 from $11.7m in FY23.

The Buy rating and $1.10 target are unchanged.

This report was published on March 22, 2024.

Target price is $1.10 Current Price is $0.55 Difference: $0.555
If RKN meets the Petra Capital target it will return approximately 102% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 2.50 cents and EPS of 4.10 cents.
At the last closing share price the estimated dividend yield is 4.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.29.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 3.00 cents and EPS of 4.90 cents.
At the last closing share price the estimated dividend yield is 5.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.12.

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

RMD    RESMED INC

Medical Equipment & Devices – Overnight Price: $29.93

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

ResMed's stock continues to recover as the outlook for maintained CPAP global market share solidifies, says Wilsons.

The broker is anticipating Eli Lilly to announce top line data from studies relating to its SURMOUNT-OSA trial, which has explored efficacy both as a monotreatment and in combination with CPAP. 

Wilsons sees no potential negative for CPAP devices from a positive readout. 

The Overweight rating is retained and the target price increases to $32.90 from $31.28.

This report was published on March 26, 2024.

Target price is $32.90 Current Price is $29.93 Difference: $2.97
If RMD meets the Wilsons target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $34.21, suggesting upside of 13.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 29.49 cents and EPS of 111.57 cents.
At the last closing share price the estimated dividend yield is 0.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 116.6, implying annual growth of N/A.
Current consensus DPS estimate is 30.2, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 25.8.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 31.92 cents and EPS of 127.07 cents.
At the last closing share price the estimated dividend yield is 1.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 132.4, implying annual growth of 13.6%.
Current consensus DPS estimate is 33.0, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 22.7.

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

SNL    SUPPLY NETWORK LIMITED

Automobiles & Components – Overnight Price: $18.68

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

Moelis has initiated coverage of Supply Network with a Buy rating and $21.26 target.

Supply Network is a leading independent supplier of truck and bus aftermarket replacement parts. Through its brand, Multispares, the company primarily services A&NZ’s trucking and bus markets.

Underlying road freight demand should be supported by population growth, the broker suggests, leading to an increase in kilometers travelled pa. After accounting for price increases of 3-4%, Moelis estimates that the industry is growing at mid-single digits pa.

Aftermarket parts suppliers like Supply Network target vehicles aged more than 5 years and dominate market share in vehicles aged more than 15. This part of the market has grown ahead of the overall fleet.

Supply Network is well positioned to benefit, Moelis believes.

This report was published on March 24, 2024.

Target price is $21.26 Current Price is $18.68 Difference: $2.58
If SNL meets the Moelis target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 50.40 cents and EPS of 75.20 cents.
At the last closing share price the estimated dividend yield is 2.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.84.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 57.40 cents and EPS of 83.20 cents.
At the last closing share price the estimated dividend yield is 3.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.45.

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) –

Early hints of a UK election in 2024 could prove a positive for Smart Parking, says Petra Capital, noting the current timeline would make it increasingly difficult for the government to impose a new private parking code before an October election. 

Having withdrawn the code, which set requirements for private parking, in June 2022, the governement has since undertaken consultation for new legislation. While draft findings are expected to be released shortly, consultation on this will not happen before May.

The Buy rating and target price of 64 cents are retained.

This report was published on March 28, 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

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