Australian Broker Call *Extra* Edition – May 16, 2024

Daily Market Reports | May 16 2024

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)

ANZ   ARB   AUB   BRG   COF   CWY   EDV   EVN   IPH (2)   LAU   LOT   PNI   QIP   VSL  

LOT    LOTUS RESOURCES LIMITED

Uranium - Overnight Price: $0.45

Canaccord Genuity rates ((LOT)) as Speculative Buy (1) -

Lotus Resources updated the Mineral Resource Estimate (MRE) for the Letlhakane asset in Botswana, showing a reduction to 118.2m pounds of U3O8 (uranium) at 345ppm, from the previous 190.4m pounds at 321ppm.

Canaccord Genuity notes this is within the scope of the analyst's expectations and the company is focusing on enhancing uranium recovery and reducing operational costs by improving feed grade.

Management expect a scoping study in 2024 supporting a valuation of $275m for Letlhakane, based on a long-term U3O8 price assumption of US$90/lb and an AUD/USD exchange rate of 0.68.

The Speculative Buy rating and target price of 54 cents are retained.

This report was published on May 9, 2024.

Target price is $0.54 Current Price is $0.45 Difference: $0.09
If LOT meets the Canaccord Genuity target it will return approximately 20% (excluding dividends, fees and charges).

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

PNI    PINNACLE INVESTMENT MANAGEMENT GROUP LIMITED

Wealth Management & Investments - Overnight Price: $12.93

Wilsons rates ((PNI)) as Overweight (1) -

Pinnacle Investment Management reported a 6% increase in Funds Under Management (FUM) to $106.0bn as of April 30, 2024, exceeding the forecast of $105.6bn.

Wilsons point to strong international (up $2.8bn) and retail inflows (up $1.1bn), despite subdued domestic institutional inflows.

The broker anticipates better performance fees in the latter half of 2024 and into 2025, supported by Pinnacle's expanding international initiatives.

The broker has adjusted  net profit forecasts for FY24 to $81.4m (up 0.7%) and up 1.3% for FY25 to $110.6m on the back of moderate FUM growth assumptions.

Overweight rating and target price revised up 6% to $14.10.

This report was published on May 9, 2024.

Target price is $14.10 Current Price is $12.93 Difference: $1.17
If PNI meets the Wilsons target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $12.21, suggesting downside of -6.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 32.70 cents and EPS of 41.20 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.1, implying annual growth of -0.6%.
Current consensus DPS estimate is 36.9, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 33.4.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 43.90 cents and EPS of 55.20 cents.
At the last closing share price the estimated dividend yield is 3.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.42.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.6, implying annual growth of 26.9%.
Current consensus DPS estimate is 42.4, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 26.4.

Market Sentiment: 0.8
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: $1.80

Petra Capital rates ((QIP)) as Downgrade to Hold from Buy (3) -

Qantm Intellectual Property has received a new acquisition proposal from IPH Ltd ((IPH)), challenging the existing bid from Adamantem.

Petra Capital assesses the new offer of $0.291 IPH shares plus a fully franked special dividend of $0.11 per Qantm Intellectual Property share, values the offer at $1.90 per share as at May 7.

This bid is approximately 4.6% higher than Adamantem's all-cash offer of $1.817 per share.

The proposed acquisition is subject to approval from both the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission due to potential market share concerns given the size of IPH Ltd. 

Rating downgraded to Hold from Buy with a $1.76 target.

This report was published on May 9, 2024.

Target price is $1.76 Current Price is $1.80 Difference: minus $0.04 (current price is over target).
If QIP meets the Petra Capital target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
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 4.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.06.

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 4.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.43.

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

VSL    VULCAN STEEL LIMITED

Steel & Scrap - Overnight Price: $6.59

Jarden rates ((VSL)) as Neutral (3) -

Jarden has deferred its expectation for a recovery in the building cycle to the beginning of 2025 (six-to-nine months later-than-initially expected), and reduced earnings forecasts for Vulcan Steel. More positively, the analysts note the company is gaining market share.

Management is confident hybrid sites will deliver expanded longer-term margins, highlights Jarden, and is keen to add growth through
potential acquisition, with the recent Ulrich acquisition set to be fully embedded by the end of 2024.

Neutral rating retained. Target price falls to NZ$7.68 from NZ$7.70.

This report was published on May 7, 2024.

Current Price is $6.59. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 21.08 cents and EPS of 28.11 cents.
At the last closing share price the estimated dividend yield is 3.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.44.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 26.82 cents and EPS of 35.79 cents.
At the last closing share price the estimated dividend yield is 4.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.41.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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 experienced, 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.

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.