Australian Broker Call *Extra* Edition – Jun 19, 2024

Daily Market Reports | Jun 19 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)

AEE   ASX (2)   CAJ (3)   CYG   DRR   EVN   IDX (3)   MEI   OCC   ORG   REH   WC8  

OCC    ORTHOCELL LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $0.36

Petra Capital rates ((OCC)) as Buy (1) -

Petra Capital believes the application for SmrtGraft in Australia by Orthocell could introduce a third revenue stream for the Celgro platform, enhancing its potential without much additional cost.

SmrtGraft is anticipated to be approved by June 2025 in Australia, the broker highlights, with a broader market applicability across multiple tendon repairs. A US market entry is expected a few years later.

Remplir, the company's nerve repair product, is on track for US approval by 1Q2025, with existing distribution synergies in place through Device Technologies.

No changes have been made to earnings forecasts. $1.28 target and Buy rating unchanged.

This report was published on June 14, 2024.

Target price is $1.28 Current Price is $0.36 Difference: $0.915
If OCC meets the Petra Capital target it will return approximately 251% (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 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.13.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.04.

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

ORG    ORIGIN ENERGY LIMITED

Infrastructure & Utilities - Overnight Price: $10.41

Jarden rates ((ORG)) as Overweight (2) -

Origin Energy updated its distribution policy at the Investor Briefing and is now targeting a minimum of 50% of free cashflow payout, up from 30-50%.

Management also aims to expand its renewables and storage portfolio to 4.0-5.0 GW by FY30, increasing its investment target by 1.5-2.5 GW through the Yanco Delta windfarm and additional battery, wind, and solar projects, notes Jarden.

Origin Energy continues to project electricity gross profit of $25-40/MWh and a gas gross profit margin of $3-4/GJ in the medium term, with lower APLNG costs enhancing overall profitability.

Jarden tweaks its EPS estimates for FY24-FY25 by -0.1% and -3.0%, respectively. Target price adjusted to $10.40 from $10.61 and Overweight rating maintained.

This report was published on June 13, 2024.

Target price is $10.40 Current Price is $10.41 Difference: minus $0.01 (current price is over target).
If ORG meets the Jarden target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $10.02, suggesting downside of -3.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 55.00 cents and EPS of 70.50 cents.
At the last closing share price the estimated dividend yield is 5.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.6, implying annual growth of 18.4%.
Current consensus DPS estimate is 58.8, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 52.50 cents and EPS of 90.70 cents.
At the last closing share price the estimated dividend yield is 5.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.3, implying annual growth of 16.1%.
Current consensus DPS estimate is 62.4, implying a prospective dividend yield of 6.0%.
Current consensus EPS estimate suggests the PER is 12.3.

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

REH    REECE LIMITED

Furniture & Renovation - Overnight Price: $25.92

Goldman Sachs rates ((REH)) as Initiation of coverage with Sell (5) -

Goldman Sachs initiates coverage of Reece with a Sell rating and a $23.35 target price.

The broker views the A&NZ business as mature with limited growth potential, generating 44% of group revenue and 59% of EBITDA.

The US market generates 56% of revenue and offers growth opportunities through store expansions and margin improvements, but these are expected to be long-dated. The analyst forecasts 7% EBITDA compound annual growth for this segment over three years.

Goldman Sachs assesses the stock is trading above its historical valuations and at an excessive premium.

Sell rating and $23.35 target.

This report was published on June 13, 2024.

Target price is $23.35 Current Price is $25.92 Difference: minus $2.57 (current price is over target).
If REH meets the Goldman Sachs target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $21.37, suggesting downside of -17.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 26.00 cents and EPS of 65.00 cents.
At the last closing share price the estimated dividend yield is 1.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.0, implying annual growth of 6.6%.
Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 40.5.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 27.00 cents and EPS of 66.00 cents.
At the last closing share price the estimated dividend yield is 1.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.9, implying annual growth of 1.4%.
Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 39.9.

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

WC8    WILDCAT RESOURCES LIMITED

New Battery Elements - Overnight Price: $0.35

Canaccord Genuity rates ((WC8)) as Speculative Buy (1) -

Wildcat Resources reported further results from the Tabba Tabba Lithium Project, notes Canaccord Genuity.

The broker expects maiden resources for Tabba Tabba in the 2H2024.

Speculative Buy rating and $1 target unchanged.

This report was published on June 13, 2024.

Target price is $1.00 Current Price is $0.35 Difference: $0.65
If WC8 meets the Canaccord Genuity target it will return approximately 186% (excluding dividends, fees and charges).

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.