Australian Broker Call *Extra* Edition – Oct 31, 2024

Daily Market Reports | Oct 31 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)

ABB   BKT   BSL   BXB (2)   CIP   CMM (2)   CUV   CXO (2)   EVN   FCL   FMG   GOZ   IFL   IGO   KAR (2)   NST (2)   REH   RMD   RRL   RWC   SDR   SM1   SOM   STX   SUL (3)   VAU (2)   WHC   WTC  

ABB    AUSSIE BROADBAND LIMITED

Telecommunication - Overnight Price: $3.76

Wilsons rates ((ABB)) as Market Weight (3) -

Wilsons comments Aussie Broadband has posted a solid Sep Q result, featuring several wholesale wins, and reiterated FY25 guidance. While directionally all positive, there could still be some sticker-shock as Origins growth rates come out, Wilsons warns.

The broker would also like to see further proof that Buddy isnt resulting in material cannibalisation from Aussies existing customers. Nonetheless, on an initial view, Wilsons' Dec Q estimates currently look achievable.

Market Weight and $3.62 target retained.

This report was published on October 25, 2024.

Target price is $3.62 Current Price is $3.76 Difference: minus $0.14 (current price is over target).
If ABB meets the Wilsons target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $4.19, suggesting upside of 11.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 4.40 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 1.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.3, implying annual growth of 57.1%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 24.6.

Forecast for FY26:

Wilsons forecasts a full year FY26 dividend of 5.70 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 1.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.9, implying annual growth of 36.6%.
Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 18.0.

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

BKT    BLACK ROCK MINING LIMITED

New Battery Elements - Overnight Price: $0.05

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

Black Rock Mining remains one of the few natural graphite developers that would be strongly profitable even at todays prices, points out Petra Capital.

Commenting on 1Q results, the analyst notes the company's large flake graphite prices have strengthened, counteracting weak graphite fines prices, with basket pricing rising to around US$1,000/t.

The broker highlights that with offtake agreements secured and C1 costs expected below US$500/t, the company maintains profitability even amid price fluctuations.

The analyst retains a Buy rating and a target price of 21c, citing secured funding arrangements and supportive graphite market conditions.

This report was published on October 30, 2024.

Target price is $0.21 Current Price is $0.05 Difference: $0.158
If BKT meets the Petra Capital target it will return approximately 304% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 52.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.33.

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

BSL    BLUESCOPE STEEL LIMITED

Steel & Scrap - Overnight Price: $20.53

Jarden rates ((BSL)) as Downgrade to Neutral from Overweight (3) -

BlueScope Steel has issued a first half earnings guidance downgrade of -25% as steel spreads and inflationary costs weigh on earnings. Unfortunately, suggests Jarden, it appears operating performances have exacerbated weaker steel spreads.

North Stars expected volume improvements have yet to offset lower-than-expected spreads, while its coatings business's performance remains below the companys expectations.

Whie surprisingly still experiencing steady demand in Australia, lower spreads, higher energy costs and non-cash accounting adjustments are suppressing returns, Jarden notes. No recovery has been noted across either NZ or the Asian operations.

A cost-out program is pending. Jarden remains constructive long term and confident BlueScope can respond to short-term cyclical pressures while building higher, less volatile earnings streams via a disciplined capital allocation process over time.

Target falls to $21.90 from $23.00, downgrade to Neutral from Overweight.

This report was published on October 30, 2024.

Target price is $21.90 Current Price is $20.53 Difference: $1.37
If BSL meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $22.54, suggesting upside of 9.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 55.00 cents and EPS of 72.30 cents.
At the last closing share price the estimated dividend yield is 2.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 114.9, implying annual growth of -36.2%.
Current consensus DPS estimate is 58.3, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 17.9.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 60.00 cents and EPS of 156.00 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 192.9, implying annual growth of 67.9%.
Current consensus DPS estimate is 60.0, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 10.6.

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

BXB    BRAMBLES LIMITED

Transportation & Logistics - Overnight Price: $18.30

Goldman Sachs rates ((BXB)) as Sell (5) -

Goldman Sachs maintains a Sell rating on Brambles and raises the target price by 3% to $16.30, reflecting updated FY25 earnings estimates post updated 1Q25 results.

The broker highlights ongoing elevated capex requirements and the risk of losing Costcos legacy business if the latter transitions to plastic pallets.

The broker's valuation appears pressured by cash flow challenges and the likelihood of future capital investments.

This report was published on October 24, 2024.

Target price is $16.30 Current Price is $18.30 Difference: minus $2 (current price is over target).
If BXB meets the Goldman Sachs target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $19.01, suggesting upside of 3.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 EPS of 93.56 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 95.0, implying annual growth of N/A.
Current consensus DPS estimate is 59.6, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 19.3.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 EPS of 104.12 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.8, implying annual growth of 11.4%.
Current consensus DPS estimate is 69.5, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 17.3.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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

Brambles has reported Sep Q revenue growth of 3%, requiring a decent acceleration in revenue growth for the balance of FY25 to meet its 4-6% guidance, Jarden notes.

Pricing remains strong and has continued to be the primary driver of revenue growth across Brambles' key operating regions, the broker highlights.

It increasingly appears to the broker as though the FY25 outlook will have a second half skew. Jarden still sees overall profitability for Brambles being supported by the normalisation of IPEP charges in conjunction with cost-to-serve benefits and network efficiency initiatives.

Overweight and $17.90 target retained.

This report was published on October 24, 2024.

Target price is $17.90 Current Price is $18.30 Difference: minus $0.4 (current price is over target).
If BXB meets the Jarden target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $19.01, suggesting upside of 3.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 83.90 cents and EPS of 92.95 cents.
At the last closing share price the estimated dividend yield is 4.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 95.0, implying annual growth of N/A.
Current consensus DPS estimate is 59.6, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 19.3.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 91.14 cents and EPS of 101.10 cents.
At the last closing share price the estimated dividend yield is 4.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.8, implying annual growth of 11.4%.
Current consensus DPS estimate is 69.5, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 17.3.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources