Australian Broker Call *Extra* Edition – Feb 21, 2020

This story features AUSTRALIAN AGRICULTURAL COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: AAC

An additional news report on the recommendation, valuation, forecast and opinion changes 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)

AAC   ARQ   BKL   BRG   CGF   CKF   CQE   ELO   ENN   FBR   HRL (2)   IEL   IMA   IPH   JAN   MIN   MP1   NEA   OSL   PAL   PME   PNI   PPE   SM1  

AAC    AUSTRALIAN AGRICULTURAL COMPANY LIMITED

Agriculture – Overnight Price: $1.22

Bell Potter rates ((AAC)) as Buy (1) –

There has been a 31% rally in cattle prices with major implications for Australian Agricultural Company’s herd value and live cattle sales, both of which are expected to increase, forecasts Bell Potter.

Believing that an improved cost structure is unlikely to be in operation before FY21 and noting the importance of the same as an earnings drive, Bell Potter has not made any changes to the earnings forecast for the current period.

Bell Potter believes the issues faced by the company are cyclical and not structural, expecting an upturn in the company’s profitability. The broker retains its Buy rating with the target price at $1.40.

The report was published on February 7, 2020.

Target price is $1.40 Current Price is $1.22 Difference: $0.18
If AAC meets the Bell Potter target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 39.35.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.00.

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

ARQ    ARQ GROUP LIMITED

IT & Support – Overnight Price: $0.23

Bell Potter rates ((ARQ)) as Downgrade to Sell from Hold (5) –

Having announced the signing of an agreement to sell its Enterprise Services division for $35m, Bell Potter believes the net proceeds will be between $20-25m on account of deferred consideration, transaction costs, working capital and insurance cover. The broker states the funds from the proceeds would be used to reduce the debt of $60m.

Bell Potter believes the amount of debt left would still be huge given that the remaining SMB division is forecasted to generate operating profits of around $10m in 2019.

Having updated forecasts with only SMB division, the broker expects operating profits to be $11.8m in 2020 and grow modestly in 2021 and 2022.

The broker expects the sale of the SMB division in the future and has downgraded the rating to Sell with the target price at $0.25.

The report was published on February 12, 2020.

Target price is $0.25 Current Price is $0.23 Difference: $0.02
If ARQ meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY19:

Bell Potter forecasts a full year FY19 dividend of 0.00 cents and EPS of minus 2.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.93.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.69.

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

BKL    BLACKMORES LIMITED

Health & Nutrition – Overnight Price: $70.94

Wilsons rates ((BKL)) as Underweight (5) –

Blackmores released the first-half result which was a little better than expected along with a disappointing full-year guidance. The operating cash flows were lower with lower marketing spend offset by higher costs.

The broker warns about an increase in the balance sheet risk due to significant earnings reduction in FY20. Sale of receivables which incurred in the first half is expected to be an ongoing feature. The broker also factors in supply chain disruptions due to coronavirus and anticipates a loss of circa -$15m in sales in the second half.

The broker's forecasts sit on the lower end of the guidance range for FY20 for both revenue and profit after taxes but an increase in the profit after taxes in FY21 and FY22 is expected.

Wilsons considers the stock overpriced and rates it as Underweight with the target price at $59.40.

The report was published on February 13, 2020.

Target price is $59.40 Current Price is $70.94 Difference: minus $11.54 (current price is over target).
If BKL meets the Wilsons target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $66.04, suggesting downside of -6.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of 90.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 78.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 108.3, implying annual growth of -65.0%.
Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 65.5.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 134.40 cents and EPS of 192.00 cents.
At the last closing share price the estimated dividend yield is 1.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 209.7, implying annual growth of 93.6%.
Current consensus DPS estimate is 143.1, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 33.8.

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

BRG    BREVILLE GROUP LIMITED

Household & Personal Products – Overnight Price: $22.32

Bell Potter rates ((BRG)) as Upgrade to Hold from Sell (3) –

Bell Potter notes strong double-digit revenue growth for Breville Group’s product segment across all markets with Europe having the highest revenue lift of 60%. The rollout in Europe continues to progress well with traction being achieved in Germany, Switzerland and Spain with France being next in line in the second half.

Bell Potter notes a direct go-to-market model enables the group to have an owned brand market presence and close engagement with retail partners in Europe, leading to deeper market penetration and stronger revenue growth.

The broker expects FY20 operating profits to be consistent with the current consensus of circa $110m. Bell Potter believes the valuations to be justified and upgrades to Hold from Sell with the target price at $25.15.

The report was published on February 13, 2020.

Target price is $25.15 Current Price is $22.32 Difference: $2.83
If BRG meets the Bell Potter target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $22.01, suggesting downside of -1.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 40.50 cents and EPS of 57.80 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.9, implying annual growth of 11.8%.
Current consensus DPS estimate is 40.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 38.5.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 48.50 cents and EPS of 68.60 cents.
At the last closing share price the estimated dividend yield is 2.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.3, implying annual growth of 14.5%.
Current consensus DPS estimate is 45.8, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 33.7.

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

CGF    CHALLENGER LIMITED

Wealth Management & Investments – Overnight Price: $10.38

Shaw and Partners rates ((CGF)) as Sell (5) –

Challenger released first-half results and Shaw and Partners notes a decline in the company’s cash operating earnings margin to 3.53% from 3.67% during the first half. The broker considers low returns on shareholders’ funds as well as low capital growth to be the reason behind the decline.

Shaw and Partners also notes the company’s spread of investment yield over the cost of funds is likely to decline. Added to this is a reduction of -$8m in investment income in the second half, further reducing the investment yield.

With domestic annuity sales down -24% along with an increase in maturities and repayments by -13% in the first half, the broker anticipates a net annuity flow decline of -81% for the period. The broker puts a Sell rating on the stock with the target price of $6.00.

The report was published on February 12, 2020.

Target price is $6.00 Current Price is $10.38 Difference: minus $4.38 (current price is over target).
If CGF meets the Shaw and Partners target it will return approximately minus 42% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $9.10, suggesting downside of -12.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Shaw and Partners forecasts a full year FY20 dividend of 36.00 cents and EPS of 69.00 cents.
At the last closing share price the estimated dividend yield is 3.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.7, implying annual growth of 11.4%.
Current consensus DPS estimate is 35.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 18.3.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 36.00 cents and EPS of 58.00 cents.
At the last closing share price the estimated dividend yield is 3.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 59.7, implying annual growth of 5.3%.
Current consensus DPS estimate is 35.9, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 17.4.

Market Sentiment: -0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CKF    COLLINS FOODS LIMITED

Food, Beverages & Tobacco – Overnight Price: $9.89

Wilsons rates ((CKF)) as Upgrade to Overweight from Market Weight (1) –

Wilsons notes robust trading conditions for Collins Foods, especially with an increase in KFC sales, while expecting the same for Taco Bells in FY22. The broker believes EPS growth would remain in low teens till FY21 before increasing to 20% in FY22, mostly on the back of Taco Bell shifting to positive earnings.

On the financial front, the broker expects the net debt to remain the same due to Collins Foods’ store openings, but the leverage ratio to decrease to 1.3x from 1.8x in FY22.

The stock price has declined by -10% since the first half of FY20 results and the broker considers the valuation attractive currently. Wilsons upgrades to Overweight from Market Weight with the target price at $10.65.

The report was published on February 12, 2020.

Target price is $10.65 Current Price is $9.89 Difference: $0.76
If CKF meets the Wilsons target it will return approximately 8% (excluding dividends, fees and charges).
The company's fiscal year ends in May.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 20.50 cents and EPS of 42.80 cents.
At the last closing share price the estimated dividend yield is 2.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.11.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 24.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 2.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.60.

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

CQE    CHARTER HALL SOCIAL INFRASTRUCTURE REIT

Childcare – Overnight Price: $3.83

Canaccord Genuity rates ((CQE)) as Hold (3) –

Charter Hall Social Infrastructure REIT delivered a solid first-half result with major metrics in-line with Canaccord Genuity’s expectations. The broker is positive about the REIT owing to factors like high occupancy, conservative triple net leases, strong yields, long lease expiry and a predictable earnings profile.

Canaccord Genuity notes the company signed 45 new long-term leases and is also upbeat about the childcare sector. The broker notes there to be no change in the company’s EPS and distribution guidance and believes the stock price is close to fair value.

The broker maintains the Hold rating with the target price at $3.54.

The report was published on February 12, 2020.

Target price is $3.54 Current Price is $3.83 Difference: minus $0.29 (current price is over target).
If CQE meets the Canaccord Genuity target it will return approximately minus 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 16.70 cents and EPS of 17.20 cents.
At the last closing share price the estimated dividend yield is 4.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.27.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 17.50 cents and EPS of 18.20 cents.
At the last closing share price the estimated dividend yield is 4.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.04.

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

ELO    ELMO SOFTWARE LIMITED

Software & Services – Overnight Price: $7.92

Wilsons rates ((ELO)) as Underweight (5) –

Elmo Software has reported first-half results and, with organic top-line growth of about 35%, the numbers are in-line with Wilsons forecasts, albeit with the operating losses a tad higher than expected.

The broker is worried about the steep rise in costs and notes R&D on a cash-basis now forming circa 45% of revenue with an eye on the customer gross-adds number versus the need for a sizable sales team.

The company acquired Vocam, a cloud-based video e-learning content provider for $3.5m, adding 150 customers. Wilsons expects the deal to become accretive over time.

The broker believes the stock's valuation is already stretched in comparison to peers and rates the stock as Underweight with the target price at $6.61.

The report was published on February 12, 2020.

Target price is $6.61 Current Price is $7.92 Difference: minus $1.31 (current price is over target).
If ELO meets the Wilsons target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 22.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 35.04.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 22.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 35.84.

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

ENN    ELANOR INVESTORS GROUP

Wealth Management & Investments – Overnight Price: $2.13

Moelis rates ((ENN)) as Buy (1) –

Elanor Investors Group delivered a strong first half result with core earnings up 85% to $12.4m. The annualised recurring fund management run rate was $13.8m, up 37%, notes Moelis and the group added $0.3bn in Funds Under Management (FUM). The group listed ECF on the ASX along with acquiring Garema Court in Canberra for $71.5m.

Finally, the group launched a healthcare real estate fund that would settle in the second half of FY20, and acquired Mogo Zoo.

The broker considers the group to be well-positioned for growth, offering a lucrative dividend yield of circa 7.6%. The company is seen as an attractive investment opportunity and Moelis maintains the rating at Buy. The target price is $2.43.

The report was published on February 18, 2020.is report was published on February 19, 2019.

Target price is $2.43 Current Price is $2.13 Difference: $0.3
If ENN meets the Moelis target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 16.50 cents and EPS of 18.20 cents.
At the last closing share price the estimated dividend yield is 7.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.70.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 16.70 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 7.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.03.

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

FBR    FBR LTD

Building Products & Services – Overnight Price: $0.05

Bell Potter rates ((FBR)) as Initiation of coverage with Buy (1) –

FBR is an Australian robotic technology company developing and commercialising automated bricklaying machine, Hadrian X. Bell Potter is positive about the company on account of the commercially viable laying speeds and precision by the robot, along with advantages the machine offers over traditional bricklayers.

The broker is mindful of the attractive returns and payback period of the machine coupled with the company establishing relationships with multinational brick and block manufacturers so as to have access to a large market.

Bell Potter is waiting for clarity on the timeframe for commercialisation and initiates coverage on the stock with a Buy (Speculative) recommendation and target price at $0.069 per share.

The report was published on February 11, 2020.

Target price is $0.07 Current Price is $0.05 Difference: $0.019
If FBR meets the Bell Potter target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.00.

Forecast for FY21:

Bell Potter forecasts a full year FY21 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 12.50.

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

HRL    HRL HOLDINGS LTD

Industrial Sector Contractors & Engineers – Overnight Price: $0.16

Bell Potter rates ((HRL)) as Buy (1) –

The first-half results for HRL Holdings, with revenue of $16.3m and operating profit of $2.6m, were in-line with Bell Potter’s expectations.

This result was on account of multiple factors like growth in the Analytica Food and Environment business, HAZMAT showing a major turnaround and the software business having high operating leverage, notes the broker.

Bell Potter is confident about the company’s prospects and has upgraded EPS forecasts by 3.4%, 9% and 11.4% for FY20, FY21 and FY22 respectively. Other factors like the company’s momentum to deliver strong growth and an increase in cash flows due to the completion of acquisition earn-out payments, further support the positive outlook on the company.

Bell Potter retains its Buy rating with the target price at $0.17.

The report was published on February 7, 2020.

Target price is $0.17 Current Price is $0.16 Difference: $0.01
If HRL meets the Bell Potter target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.86.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

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

---

Canaccord Genuity rates ((HRL)) as Buy (1) –

HRL Holdings has reported operating profits of $2.6m for the first half of FY20, recording a 265% increase on revenues. The result shows recovery from the impact of the decline of methamphetamine-related work in the first half of 2019, notes Canaccord Genuity.

The broker believes the revenues have a 1H/2H skew of 35%/65% and has kept forecast operating profit for FY20 largely unchanged at $7m. Given the strong cash generation of the business along with the final earn-out payment made to the vendors of Analytica, the broker is of the opinion that the current $3.3m of bank loans could be paid off by the calendar year-end.

The broker holds on to its Buy recommendation with the target price at $0.18.

The report was published on February 9, 2020.

Target price is $0.18 Current Price is $0.16 Difference: $0.02
If HRL meets the Canaccord Genuity target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.64 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.00.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.76 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.05.

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

IEL    IDP EDUCATION LIMITED

Education & Tuition – Overnight Price: $24.19

Goldman Sachs rates ((IEL)) as Upgrade to Buy from Neutral (1) –

IDP Education reported first-half results with revenue and operating profits at $379m and $96m respectively. The stock performed strongly after a period of underperformance but the broker does not consider the latter to be due to structural issues and, in fact, expects the operating performance to remain solid.

Goldman Sachs considers the company’s multi-destination student placement segment as the main growth driver for the present and future and notes a stronger than expected student placement volume with higher than expected gross margins in the English language testing business.

The broker upgrades its rating to Buy from Neutral with the target price increased to $25.40.

The report was published on February 13, 2020.

Target price is $25.40 Current Price is $24.19 Difference: $1.21
If IEL meets the Goldman Sachs target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $22.61, suggesting downside of -6.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 28.00 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 1.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 65.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.1, implying annual growth of 37.5%.
Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 67.0.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 34.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 1.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 50.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.8, implying annual growth of 26.9%.
Current consensus DPS estimate is 33.8, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 52.8.

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

IMA    IMAGE RESOURCES NL

Mineral Sands – Overnight Price: $0.21

Hartleys rates ((IMA)) as Buy (2) –

Image Resources delivered a solid 2019 result, suggests the broker. The company finished the December quarter with a record production of circa 32kt of Heavy Mineral Concentrate (HMC). This, feels Hartleys, bodes well for the year 2020.

The company recently revised production guidance upwards for 2020 and 2021 to 300-330kt, notes the broker, along with improving the net debt position to $6m. Image Resources, predicts Hartleys, is on track to be in a net cash position early in the March quarter.

The broker forecasts production and sales of 315kt of HMC but stresses on the need for the company to achieve exploration success to regain its positive share price momentum, as well as look for mine life extensions in the short term.

The broker retains its Buy recommendation and increases the target price to $0.32 from $0.31.

The report was published on February 3, 2020.

Target price is $0.32 Current Price is $0.21 Difference: $0.11
If IMA meets the Hartleys target it will return approximately 52% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Hartleys forecasts a full year FY20 dividend of 0.00 cents and EPS of 6.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.18.

Forecast for FY21:

Hartleys forecasts a full year FY21 dividend of 0.00 cents and EPS of 8.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.59.

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

IPH    IPH LIMITED

Legal – Overnight Price: $9.85

Bell Potter rates ((IPH)) as Hold (3) –

IPH announced first-half results with operating profits of $54.9m, up 36% and in-line with guidance. The company's Asia business witnessed strong performance with like-for-like revenue and operating profit growth of 15% and 18% respectively in the half.

The performance of Australia was good despite a decrease in patent filings, achieving a 4% like-for-like revenue growth, notes the broker.

XIP, the new addition, contributed $9.5m in operating profits with IPH net synergies estimated to be worth circa 3.4m in FY20 along with an additional $2-2.5m from FY21 due to integration of Watermark into Griffith Hack, observes the broker.

Bell Potter is positive about the company’s growth prospects and maintain its Hold rating with the target price at $9.55.

The report was published on February 13, 2020.

Target price is $9.55 Current Price is $9.85 Difference: minus $0.3 (current price is over target).
If IPH meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 28.50 cents and EPS of 37.50 cents.
At the last closing share price the estimated dividend yield is 2.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.27.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 31.60 cents and EPS of 41.60 cents.
At the last closing share price the estimated dividend yield is 3.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.68.

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

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.41

Bell Potter rates ((JAN)) as Downgrade to Hold from Buy (3) –

Janison Education released first-half results which showed revenue of $11.4m, up 14% while operating profit was $1.3m, up $1.8m. The gross margins improved to 46% due to a shift to higher-margin platform revenue in the organic business. Revenue and operating profit contributions from the LTC acquisition were $2.8m and $1m respectively.

Bell Potter notes management expects profitable growth to continue in the second half and has reaffirmed guidance figures for the full year. The broker anticipates a lower than expected project services revenue and has reduced underlying EPS forecasts by -28-38% across the period from FY20-22 due to general conservatism.

Bell Potter is cautious and wants to wait for more evidence of better execution during the second half, particularly the transition of LTC clients onto a digital/hybrid assessment solution.

The rating has been downgraded to Hold with the target price unchanged at $0.46.

The report was published on February 12, 2020.

Target price is $0.46 Current Price is $0.41 Difference: $0.05
If JAN meets the Bell Potter target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 102.50.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.33.

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

MIN    MINERAL RESOURCES LIMITED

Iron Ore – Overnight Price: $19.59

Bell Potter rates ((MIN)) as Buy (1) –

The first half of Mineral Resources' FY20 saw operating profits at $330m due to a strong performance from the mining services division along with strong iron ore prices, comment the analysts at Bell Potter.

On account of the ramp-up at Koolyanobbing, higher crushing tonnes in existing external contracts and contribution from three new external contracts, Bell Potter expects mining services to exceed FY20 operating profit guidance of $280m-300m.

The broker incorporates increased iron ore production at Koolyanobbing with revision to capital expenditure and depreciation forecasts, leading to a decline in EPS forecasts by -2-3% for both FY20 and FY21 and a 10% increase in FY22.

Bell Potter retains the Buy rating but notes potential for short term volatility due to the impact of the coronavirus on iron ore pricing and China’s GDP growth. The target price is increased to $19.90 from $19.60.

The report was published on February 12, 2020.

Target price is $19.90 Current Price is $19.59 Difference: $0.31
If MIN meets the Bell Potter target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $17.90, suggesting downside of -8.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 74.00 cents and EPS of 148.10 cents.
At the last closing share price the estimated dividend yield is 3.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 187.6, implying annual growth of 115.6%.
Current consensus DPS estimate is 83.0, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 10.4.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 67.00 cents and EPS of 133.10 cents.
At the last closing share price the estimated dividend yield is 3.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 179.3, implying annual growth of -4.4%.
Current consensus DPS estimate is 82.0, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 10.9.

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

MP1    MEGAPORT LIMITED

Cloud services – Overnight Price: $12.06

Canaccord Genuity rates ((MP1)) as Hold (3) –

Megaport reported revenue growth of 70% year-on-year for the fourth consecutive half-year result. This trend is set to moderate in the future with Canaccord Genuity forecasting the second-half revenue growth to be 59%, mostly due to the large base effect.

The broker appreciates the fact that there exists a healthy balance in revenue growth between both volume and usage. The revenue is expected to grow substantially more than the costs with the operating profits expected to reach breakeven during FY22, notes Canaccord Genuity.

The broker retains its Hold recommendation with the target price at $10.65.

The report was published on February 12, 2020.

Target price is $10.65 Current Price is $12.06 Difference: minus $1.41 (current price is over target).
If MP1 meets the Canaccord Genuity target it will return approximately minus 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $11.93, suggesting downside of -1.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 27.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 44.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -24.4, 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 FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 23.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 51.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -16.8, 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.

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

NEA    NEARMAP LTD

Software & Services – Overnight Price: $1.91

Goldman Sachs rates ((NEA)) as Initiation of coverage with Buy (1) –

Nearmap is a leading aerial imagery services provider in A&NZ and North America. The company recently revised its FY20 Annualised Contract Value guidance, indicating near-term challenges in scaling operations in the US. 

Goldman Sachs forecasts a FY19-FY22 revenue CAGR (compounded annual growth rate) of 22% and considers execution in the US a key factor with 70% of Nearmap’s revenue growth forecasts derived from there.

Goldman Sachs is positive about the company prospects due to factors like a large market opportunity, broadening uses and fragmented competition. The broker initiates coverage on the stock with a Buy rating and target price of $2.25.

The report was published on February 12, 2020.

Target price is $2.25 Current Price is $1.91 Difference: $0.34
If NEA meets the Goldman Sachs target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $2.70, suggesting upside of 41.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Goldman Sachs forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.08 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2387.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -8.7, 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 FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.07 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2728.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.9, 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.

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

OSL    ONCOSIL MEDICAL LTD

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.15

Bell Potter rates ((OSL)) as Buy (1) –

With the imminent granting of the CE Mark, the prospects for Oncosil are looking up. Bell Potter notes this to be a very huge event not only for the company but even for the treatment of pancreatic cancer since 2013.

Bell Potter is hopeful of the treatment regime being well supported by physicians in the UK and major markets in Asia, Australia and Europe and retains its Buy rating. The target price is $0.30.

The report was published on February 10, 2020.

Target price is $0.30 Current Price is $0.15 Difference: $0.15
If OSL meets the Bell Potter target it will return approximately 100% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.38.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.52.

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

PAL    PALLA PHARMA LTD

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.88

CCZ Equities rates ((PAL)) as Initiation of coverage with Buy (1) –

Palla Pharma is an opiate manufacturer, contracting farmers in Australia and Eastern Europe to grow opium poppies for manufacturing narcotic raw material and opiate-based API globally. The company enjoys some key competitive advantages and is, according to the broker, well placed to gain market share in the future.

Palla Pharma achieved a strong 58% three-year CAGR (compounded annual growth rate) of $55m in 2019, notes CCZ Equities. This is expected to improve further as the company continues to increase production numbers. The broker is also hopeful of a potential FDF marketing authorisation purchase.

The broker initiates coverage on the stock with a Buy rating. The target price is $1.23.

The report was published on January 31, 2020.

Target price is $1.23 Current Price is $0.88 Difference: $0.35
If PAL meets the CCZ Equities target it will return approximately 40% (excluding dividends, fees and charges).

Forecast for FY20:

CCZ Equities forecasts a full year FY20 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 48.89.

Forecast for FY21:

CCZ Equities forecasts a full year FY21 dividend of 0.00 cents and EPS of 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.00.

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

PME    PRO MEDICUS LIMITED

Medical Equipment & Devices – Overnight Price: $22.38

Bell Potter rates ((PME)) as Hold (3) –

Pro Medicus reported growth in revenue and operating profit by 15.8% and 12.8% for the first half, driven by revenues from the two largest hospitals within Partners Healthcare Group in Massachusetts.

Bell Potter also notes an increase in revenues from ongoing contracts with revenues expected to rise more in the second half from the commencement of operations at Duke University.

Pro Medicus continues to invest heavily in R&D and, over the next two-three years, would begin to generate revenue growth from new clients in ophthalmology and cardiology imaging, observes the broker.

Bell Potter suggests the changes to earnings are negligible and the company remains well-positioned to capitalise on future growth opportunities but for now, the broker downgrades the stock to Hold with the target price at $30.

The report was published on February 13, 2020.

Target price is $30.00 Current Price is $22.38 Difference: $7.62
If PME meets the Bell Potter target it will return approximately 34% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 12.00 cents and EPS of 23.70 cents.
At the last closing share price the estimated dividend yield is 0.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 94.43.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 15.40 cents and EPS of 30.90 cents.
At the last closing share price the estimated dividend yield is 0.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 72.43.

Market Sentiment: 0.5
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: $6.63

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

After delivering a solid first-half result, Pinnacle Investment is well on its way to achieving FY20 forecasts, opines Wilsons. The second-half depends on Palisade’s continued run of performance fee delivery as inflow rates are subdued compared to the past, notes the broker.

The net profit after taxes was $13.4m, 8.9% above Wilsons' forecast for the first half and represents 38% of the company’s FY20 forecast figure of $36.5m.

The broker has left FY20 estimates unchanged, taking a wait-and-watch approach due to a subdued inflow environment coupled with concerns about the bushfire impact on the stock market.

Wilsons retains its Overweight rating with the target price at $6.12.

The report was published on February 7, 2020.

Target price is $6.12 Current Price is $6.63 Difference: minus $0.51 (current price is over target).
If PNI meets the Wilsons target it will return approximately minus 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $6.63, suggesting downside of -0.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 17.80 cents and EPS of 20.10 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 32.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.5, implying annual growth of 12.0%.
Current consensus DPS estimate is 18.2, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 32.3.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 21.30 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 3.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.7, implying annual growth of 25.4%.
Current consensus DPS estimate is 22.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 25.8.

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

PPE    PEOPLE INFRASTRUCTURE LTD

Jobs & Skilled Labour Services – Overnight Price: $3.77

Moelis rates ((PPE)) as Buy (1) –

People Infrastructure released first-half results with operating profits of $12.9m. The figure was circa -6% below Moelis’s expectations but the broker isn’t worried much as this was mainly due to investments undertaken during the half with results expected in FY21.

The broker expects a long runway for both organic and acquisitive growth for the company. With major verticals possessing the highest expected national employment growth over the next five years, the broker considers the market may be undervaluing the quality of People Infrastructure’s earnings.

Moelis finds the stock valued attractively and believes upside to EPS growth estimates may come from acquisitions, although this is not official yet. The broker retains the Buy rating with the target price at $4.44.

The report was published on February 17, 2020.

Target price is $4.44 Current Price is $3.77 Difference: $0.67
If PPE meets the Moelis target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 9.80 cents and EPS of 23.50 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.04.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 12.70 cents and EPS of 25.30 cents.
At the last closing share price the estimated dividend yield is 3.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.90.

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

SM1    SYNLAIT MILK LIMITED

Dairy – Overnight Price: $6.51

Bell Potter rates ((SM1)) as Hold (3) –

Synlait Milk delivered its second earnings downgrade in the past six months of -6-22% in terms of profit after taxes, notes Bell Potter.

There has been a slowdown in infant nutrition exports to China along with softening base powder demand from second-tier brands. The broker notes company management is less optimistic about customer diversification. The broker remarks the downward guidance includes a -NZ$4-5m contingency for supply chain disruption from the coronavirus.

Bell Potter has materially downgraded the company’s net profits after taxes by -25%, -30% and -31% for FY20, FY21 and FY22 and downgrades the rating to Hold from Buy with the target price at $7.10.

The report was published on February 13, 2020.

Target price is $7.10 Current Price is $6.51 Difference: $0.59
If SM1 meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $6.95, suggesting upside of 6.8%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 0.00 cents and EPS of 37.68 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.3, 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 14.4.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 43.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.9, implying annual growth of 23.4%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 11.6.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
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 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.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

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.

Click to view our Glossary of Financial Terms