Australian Broker Call *Extra* Edition – Mar 30, 2020

This story features LIFE360 INC, and other companies. For more info SHARE ANALYSIS: 360

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)

360   AVJ   CUV   CVL   EGH   EQT   FCL   IFM   LYL   MAQ   MNF   NAN   OCL   PBH   PFP   PGX   PNV   PRN   PSI   RBL   RMC   SLK (3)   TLX   TNK   WZR  

360    LIFE360 INC

Software & Services – Overnight Price: $1.80

Moelis rates ((360)) as Buy (1) –

Life360 released first-half figures for FY19, showing an operating loss of -US$28.7m from revenue of US$58.9m.

FY20 guidance by the company has Monthly Active Users (MAUs) till December 2020 pegged at 35m with revenue at US$90m. The location-based services provider also expects more share-based compensation expenses with operating loss (pre-stock compensation) below -US$20m.

Outperforming the guidance rests on performance in the second half but even at the bottom end, 360's revenue generation growth stands at 52.7% although pointing towards a relatively flat operating profit, observes Moelis.

Assuming lower revenue and higher share-based compensation, Moelis cuts revenue estimates by -2.4% to US$92.3m while decreasing operating profit to -$27.6m.

Buy rating maintained. Target price of $6.11.

The report was published on February 28, 2020.

Target price is $6.51 Current Price is $1.80 Difference: $4.71
If 360 meets the Moelis target it will return approximately 262% (excluding dividends, fees and charges).
The company's fiscal year ends in November.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 23.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.73.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 8.64 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.84.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

AVJ    AVJENNINGS LIMITED

Housing & Construction – Overnight Price: $0.43

E.L. & C Baillieu rates ((AVJ)) as Buy (1) –

AVJennings's first-half figures surpassed broker forecasts with net profit after tax at $8.9m and revenue of $171m.

With FY20 guidance pointing towards a stronger-than-last year performance, the company is cautiously optimistic, prompting the broker to increase revenue forecast for FY20-21 by 3-5% while keeping the dividend forecast intact.

Driven by factors like a solid result, signs of housing market recovery, strong economic fundamentals and shortage of housing stock, the broker expects positive earnings momentum over the next 12-18 months.

Buy retained. Target price $0.65.

The report was published on February 26, 2020.

Target price is $0.65 Current Price is $0.43 Difference: $0.22
If AVJ meets the E.L. & C Baillieu target it will return approximately 51% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 3.50 cents and EPS of 5.30 cents.
At the last closing share price the estimated dividend yield is 8.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.11.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 4.00 cents and EPS of 5.80 cents.
At the last closing share price the estimated dividend yield is 9.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.41.

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

CUV    CLINUVEL PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $18.89

Moelis rates ((CUV)) as Buy (1) –

First half revenue at Clinuvel Pharmaceuticals stood 11% above forecast at $10m, although operating profit and net profit after tax fell -77% and -74% below Moelis's expectations driven by higher than expected costs. 

With no formal guidance from the company, the broker expects second-half to be hit somewhat due to the coronavirus. EPS forecast reduced by -10-30%.

The broker retains Buy with target price at $32.15.

The report was published on February 27, 2020.

Target price is $32.15 Current Price is $18.89 Difference: $13.26
If CUV meets the Moelis target it will return approximately 70% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 2.50 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 0.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 72.65.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 2.70 cents and EPS of 27.60 cents.
At the last closing share price the estimated dividend yield is 0.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.44.

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

CVL    CIVMEC LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.43

Euroz rates ((CVL)) as Speculative Buy (1) –

Civmec's first-half results saw net profit after tax worth $8m from $166m in revenues with broker Euroz comfortable with the full-year net profit after tax forecast of $17.3m.

The outlook remains the same with the broker expecting margin improvement with second-half including ramping up of many major projects and the commencement of the Offshore Patrol Vessel program’s next phase.

Speculative Buy rating maintained. The target price is $0.54 with upside potential.

The report was published on February 14, 2020.

Target price is $0.54 Current Price is $0.43 Difference: $0.11
If CVL meets the Euroz target it will return approximately 26% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Euroz forecasts a full year FY20 dividend of 0.90 cents and EPS of 3.46 cents.
At the last closing share price the estimated dividend yield is 2.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.43.

Forecast for FY21:

Euroz forecasts a full year FY21 dividend of 0.90 cents and EPS of 3.70 cents.
At the last closing share price the estimated dividend yield is 2.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.62.

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

EGH    EUREKA GROUP HOLDINGS LIMITED

Aged Care & Seniors – Overnight Price: $0.28

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

Eureka Group’s first-half showed progress with operating profit at $4.1m, well on track to achieve FY20 guidance, comments Canaccord Genuity while the broker forecasts $8.5m for the year.

With the group establishing a consistent earnings base and improving fundamentals, the expectation is to deliver strong earnings growth in the medium term, states the broker, estimating EPS CAGR at 19% during FY20-24.

Buy rating maintained with target price increased to $0.46 from $0.45.

The report was published on February 26, 2020.

Target price is $0.46 Current Price is $0.28 Difference: $0.18
If EGH meets the Canaccord Genuity target it will return approximately 64% (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 1.10 cents and EPS of 2.50 cents.
At the last closing share price the estimated dividend yield is 3.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.20.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 1.20 cents and EPS of 3.30 cents.
At the last closing share price the estimated dividend yield is 4.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.48.

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

EQT    EQT HOLDINGS LIMITED

Diversified Financials – Overnight Price: $19.15

E.L. & C Baillieu rates ((EQT)) as Buy (1) –

Equity Trustees half-yearly results were in-line with Baillieu’s estimates with revenue up 5.6% to $48.9m while net profit after tax stood at $11.5m, up 2.3%.

Although without formal guidance, Equity Trustees describes the future outlook as encouraging for the rest of the year, notes the broker.

With strong credentials backed by the so-far announced deals, the broker expects strong demand and a healthy multi-year EPS growth from opportunities in superannuation, gains in the UK business and momentum in Responsible Entity (RE).

Buy retained. Target price stands at $36.

The report was published on February 26, 2020.

Target price is $36.00 Current Price is $19.15 Difference: $16.85
If EQT meets the E.L. & C Baillieu target it will return approximately 88% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 97.00 cents and EPS of 129.10 cents.
At the last closing share price the estimated dividend yield is 5.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.83.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 111.50 cents and EPS of 148.50 cents.
At the last closing share price the estimated dividend yield is 5.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.90.

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

FCL    FINEOS CORPORATION HOLDINGS PLC

Cloud services – Overnight Price: $2.41

Moelis rates ((FCL)) as Downgrade to Hold from Buy (3) –

Fineos Corp's first-half results beat Moelis's forecast with revenue and operating profit at EUR40.4m and EUR8.9m respectively. The figures were a result of increase in demand for professional services, notes the broker. 

While the company upgraded revenue guidance to EUR84-86m, the broker increased the revenue and operating profit estimates for FY20 by 5% and 87.7%.

Moelis considers the outlook to be positive but notes the share are already trading close to fair value. Rating reduced to Hold from Buy with target price at $4.05.

The report was published on February 27, 2020.

Target price is $4.05 Current Price is $2.41 Difference: $1.64
If FCL meets the Moelis target it will return approximately 68% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 150.63.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 86.07.

This company reports in EUR. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

IFM    INFOMEDIA LTD

Automobiles & Components – Overnight Price: $1.44

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

Driven by higher revenue and improving operating profit margins, Infomedia reported a 24% growth in net profit after tax to $9m for the first half, above Bell Potter's forecasted figure of $8.4m.

While mostly reaffirming the guidance of low double-digit growth in revenue and earnings for the second half, Infomedia considers possible upside potential as a result of growth in the Americas, states the broker.

Bell Potter estimates revenue and net profit after tax growth of 14% and 16% respectively for FY20.

Stock rated as Hold with target price at $2.30.

The report was published on February 27, 2020.

Target price is $2.30 Current Price is $1.44 Difference: $0.86
If IFM meets the Bell Potter target it will return approximately 60% (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 4.30 cents and EPS of 5.90 cents.
At the last closing share price the estimated dividend yield is 2.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.41.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.70 cents and EPS of 7.10 cents.
At the last closing share price the estimated dividend yield is 3.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.28.

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

LYL    LYCOPODIUM LIMITED

Mining Sector Contracting – Overnight Price: $4.05

Hartleys rates ((LYL)) as Buy (1) –

First-half results of Lycopodium delivered a net profit after tax of $9m, growing 5% over the first half of 2019.  

The company updated guidance for FY20 with expected revenue and net profit after tax of $220m and $14.1m respectively, states Hartleys.

Noting delays in project commencement for the company and the broader sector itself, the broker expects the situation to improve with new projects and increase in tendering activity in FY21.

Referring to Lycopodium as being well-managed and well-positioned even with project delays, the broker is confident about the company.

Buy rating retained with target price at $6.57.

The report was published on February 26, 2020.

Target price is $6.57 Current Price is $4.05 Difference: $2.52
If LYL meets the Hartleys target it will return approximately 62% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Hartleys forecasts a full year FY20 dividend of 25.00 cents and EPS of 35.30 cents.
At the last closing share price the estimated dividend yield is 6.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.47.

Forecast for FY21:

Hartleys forecasts a full year FY21 dividend of 31.60 cents and EPS of 48.70 cents.
At the last closing share price the estimated dividend yield is 7.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.32.

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

MAQ    MACQUARIE TELECOM GROUP LIMITED

Telecommunication – Overnight Price: $19.81

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

Key highlights from first-half results of Macquarie Telecom include operating profit of $27.6m, up 8%, with revenue growth in hosting at 18% and that in telecom at 2% year-on-year.

The balance sheet is marginally net debt and Canaccord Genuity expects capital expenditure to increase in the second half, setting the tone for more revenue growth. 

The Telecom company guided to an operating profit range of $55-58m, with the broker's forecast within this at $57.2m.

Buy retained with target price at $33.

The report was published on February 26, 2020.

Target price is $33.00 Current Price is $19.81 Difference: $13.19
If MAQ meets the Canaccord Genuity target it will return approximately 67% (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 74.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.63.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 0.00 cents and EPS of 77.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.50.

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

MNF    MNF GROUP LIMITED

Telecommunication – Overnight Price: $4.53

E.L. & C Baillieu rates ((MNF)) as Buy (1) –

MNF Group’s FY20 first-half result disappointed Baillieu with important parameters including revenue, operating profit and net profit after tax well below the broker’s forecast.

The group lowered FY20 guidance with estimates for operating profit between $36-39m  and net profit after tax between $14.7-16.7m, notes Baillieu.

The broker followed suit, reducing forecasts for revenue by -5-7% and cuts of -25% each to net profit after tax adjusted and EPS respectively for FY20-22.

Though disappointed with the results, Baillieu believes the stock to be good value at current levels, with potential upside to forecasts from growth in Singapore and cost/revenue synergies from the TIAB business.

The broker holds on to the Buy rating with target price at $4.90.

The report was published on February 26, 2020.

Target price is $4.90 Current Price is $4.53 Difference: $0.37
If MNF meets the E.L. & C Baillieu target it will return approximately 8% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 7.00 cents and EPS of 19.10 cents.
At the last closing share price the estimated dividend yield is 1.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.72.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 7.90 cents and EPS of 21.90 cents.
At the last closing share price the estimated dividend yield is 1.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.68.

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

NAN    NANOSONICS LIMITED

Medical Equipment & Devices – Overnight Price: $5.34

Bell Potter rates ((NAN)) as Sell (5) –

Nanosonics witnessed top-line revenue growth of 19% but with increasing operating expenses, the net result was a reduction in operating profit.

Further, capital sales of Trophon (ultrasound probe disinfection) devices to the US declined by -14% and absence of meaningful details on new product releases also disappointed Bell Potter.

The company continues to put in millions into R&D but the valuation of the pipeline remains mostly hypothetical, states the broker.

Sell rating retained with target price at $5.52.

The report was published on February 26, 2020.

Target price is $5.52 Current Price is $5.34 Difference: $0.18
If NAN meets the Bell Potter target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $6.29, suggesting upside of 17.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 EPS of 3.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 152.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 4.0, implying annual growth of -11.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 133.5.

Forecast for FY21:

Bell Potter forecasts a full year FY21 EPS of 6.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 84.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.0, implying annual growth of 100.0%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 66.8.

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

OCL    OBJECTIVE CORPORATION LIMITED

IT & Support – Overnight Price: $5.00

CCZ Equities rates ((OCL)) as Buy (1) –

Objective Corp's first-half was overall in-line with CCZ Equities' forecasts with revenue and operating profit at $33.3m and $6.8m respectively. Recurring revenue was a positive surprise, growing by 28% to $54.1m, states CCZ Equities.

The broker retains earnings forecast but tweaks the mix, reducing Keystone revenue growth to 5% while increasing Planning Solutions revenue growth to 131%. CCZ Equities reinforces the Buy rating with target price increased to $7.26 from $7.16.

The report was published on February 26, 2020.

Target price is $7.26 Current Price is $5.00 Difference: $2.26
If OCL meets the CCZ Equities target it will return approximately 45% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

CCZ Equities forecasts a full year FY20 dividend of 6.80 cents and EPS of 11.40 cents.
At the last closing share price the estimated dividend yield is 1.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.86.

Forecast for FY21:

CCZ Equities forecasts a full year FY21 dividend of 9.00 cents and EPS of 14.90 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.56.

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

PBH    POINTSBET HOLDINGS LTD

Gaming – Overnight Price: $1.71

Bell Potter rates ((PBH)) as Speculative Buy (1) –

First-half result of PointsBet Holdings highlights investment undertaken in both customer acquisition and US team to fund rollout in new US states. Even though the company saw an increase in net revenue by 103% to $27.4m, operating loss widened to -$28.4m.

Bell Potter states the corporate bookmaker is set to launch operations in four new states in the US and expects to gain 10% market share. With the commencement of in-house technology development to support rollout of iGaming products, there is potential for offering additional betting services with increase in client retention and client acquisition. 

Bell Potter has downgraded operating loss forecasts for FY20 to -$52.3m due to increase in additional costs in customer acquisition. The broker also expects decrease in Customer Lifetime Valuation (CLV) to $6.45 from $7.30

Speculative Buy rating retained.

The report was published on February 26, 2020.

Target price is $7.30 Current Price is $1.71 Difference: $5.59
If PBH meets the Bell Potter target it will return approximately 327% (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 39.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.36.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 33.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.14.

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

PFP    PROPEL FUNERAL PARTNERS LIMITED

Consumer Products & Services – Overnight Price: $2.31

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

Half-yearly figures for Propel Funeral Partners outstripped the broker's with operating profit at $14.7m generated from revenue of $57m.

The H1 result highlights include strong organic revenue growth and operating profit margin respectively and a committed acquisition strategy, with Gregson & Weight and Grahams Funeral being the latest to be acquired, notes the broker.

Bell Potter reduces FY20 EPS forecast by -5%. Stock rated as Buy with target price of $3.80.

The report was published on February 27, 2020.

Target price is $3.80 Current Price is $2.31 Difference: $1.49
If PFP meets the Bell Potter target it will return approximately 65% (excluding dividends, fees and charges).

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 11.00 cents and EPS of 15.60 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.81.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 13.10 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 5.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.20.

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

PGX    PRIMERO GROUP LIMITED

Mining Sector Contracting – Overnight Price: $0.14

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

Half-yearly earnings of the Primero Group disappointed Canaccord Genuity after booking revenue worth $40m related to client Wartsila at 0% margin. Even though operating profit at $4.1m fell short of the broker's corresponding $6.1m estimate, on the positive side, business ex-Wartsila was in line with Canaccord Genuity.

With FY20 contracted order book at $195m and FY21 order book at $170m, the group guides towards second-half operating profit margins of 6%-8%, notes the broker.

Even though cautious about Wartsila being a credit risk, the broker notes arbitration process in South Australia is relatively streamlined with time between claim and payment as little as a month.

The broker retains Buy rating with target price decreased to $0.54 from $0.70.

The report was published on February 25, 2020.

Target price is $0.54 Current Price is $0.14 Difference: $0.4
If PGX meets the Canaccord Genuity target it will return approximately 286% (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 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.50.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 2.00 cents and EPS of 5.00 cents.
At the last closing share price the estimated dividend yield is 14.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.80.

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

PNV    POLYNOVO LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.54

E.L. & C Baillieu rates ((PNV)) as Upgrade to Buy from Hold (1) –

PolyNovo's first half disappointed with net loss after tax of -$2.4m, far from Baillieu’s forecasted figure of -$1.5m but gross profit margin at 89% is a positive surprise, which the company expects would increase with scale.

The miss was driven by higher expenses (corporate and employee) from expansion of sales teams in the US and UK. The company is considering accelerating commercialisation of hernia and breast products, notes broker Baillieu.

Baillieu considers this an opportunity for investors to be part of a unique story and upgrades to Buy with target price intact at $2.75.

The report was published on February 27, 2020.

Target price is $2.75 Current Price is $1.54 Difference: $1.21
If PNV meets the E.L. & C Baillieu target it will return approximately 79% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 770.00.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 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 90.59.

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

PRN    PERENTI GLOBAL LIMITED

Mining Sector Contracting – Overnight Price: $0.57

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

Even with a challenging first half that included a terror incident in Africa, Perenti Global's operating profit at $216m outpaced Canaccord’s estimate. This was driven by underground and equipment businesses respectively while surface mining underperformed.

The company guides towards FY20 net profit after tax estimate between $115m-$120m, with the broker expecting the same to be in the top-end. Key highlights for the second half include ramp-up at Zone 5, debt refinancing and some working capital inflows, comments Canaccord Genuity.

Canaccord has increased FY20 operating profit forecast by 4% while net profit after tax estimate increases by 0.4%.

Buy maintained. Target price $2.01.

The report was published on February 26, 2020.

Target price is $2.01 Current Price is $0.57 Difference: $1.44
If PRN meets the Canaccord Genuity target it will return approximately 253% (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 7.00 cents and EPS of 17.60 cents.
At the last closing share price the estimated dividend yield is 12.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.24.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 8.00 cents and EPS of 19.50 cents.
At the last closing share price the estimated dividend yield is 14.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.92.

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

PSI    PSC INSURANCE GROUP LIMITED

Insurance – Overnight Price: $2.10

Taylor Collison rates ((PSI)) as Outperform (2) –

PSC Insurance reported flat organic revenue growth for the first half but Taylor Collison believes management would improve results and is not very concerned.

Expecting operating profit to reach $100m in FY24, the broker does admit it would be more comfortable with lower gearing levels along and a reduction in dividend payout ratio to 55-60%.

Taylor Collison has adjusted FY20-21 EPS forecasts down by -5% and -7.9%.

The broker expects the outlook to improve and rates the stock Outperform.

The report was published on February 24, 2020.

Current Price is $2.10. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY20:

Taylor Collison forecasts a full year FY20 dividend of 10.00 cents and EPS of 13.20 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.91.

Forecast for FY21:

Taylor Collison forecasts a full year FY21 dividend of 11.00 cents and EPS of 14.50 cents.
At the last closing share price the estimated dividend yield is 5.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.48.

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

RBL    REDBUBBLE LIMITED

Software & Services – Overnight Price: $0.50

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

Redbubble's half-yearly results were in-line with guidance with marketplace revenue at $180m. While giving no absolute figures, the group has guided towards improving constant currency growth rates.

Going forward, the group’s operating expenses will be a point of focus with the cost of doing business ratio (at circa 35%) materially higher than peers, notes the broker.

Canaccord believes the group has impressive market positioning and is likely to undergo multiple re-rating with reinvestment opportunity expanding. The broker retains Buy alongside a target price of $1.80.

The report was published on February 26, 2020.

Target price is $1.80 Current Price is $0.50 Difference: $1.3
If RBL meets the Canaccord Genuity target it will return approximately 260% (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 minus 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 500.00.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 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 38.46.

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

RMC    RESIMAC GROUP LTD

Banks – Overnight Price: $0.55

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

Resimac Group's first half result exceeded Bell Potter's expectations with net profit at $26.9m above Bell Potter’s estimated $24.7m. Also, led by lower-cost funding spreads, the net margin increased to 1.58% along with decrease in the cost to income ratio to 42%.

The group is confident about repeating the results in the second half, with the broker supporting this view and increasing EPS forecasts by 19.6% in FY20 and 13.1% in FY21 respectively. 

Buy retained with target price of $1.80.

The report was published on February 27, 2020.

Target price is $1.80 Current Price is $0.55 Difference: $1.25
If RMC meets the Bell Potter target it will return approximately 227% (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 3.00 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 5.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.10.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 3.50 cents and EPS of 13.80 cents.
At the last closing share price the estimated dividend yield is 6.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.99.

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

SLK    SEALINK TRAVEL GROUP LIMITED

Travel, Leisure & Tourism – Overnight Price: $2.81

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

Sealink Travel reported half-yearly figures with operating profit (pre-AASB16) of $26.1m, =3.7% below Bell Potter’s expectations, while the net profit after tax was in line with the broker’s estimate at $13.6m. Driving factors include strong growth across the Captain Cook Cruise division in NSW and WA, according to the broker.

Impacted by the bushfires and coronavirus, the group expects operating profits to be hit by circa -$5m during the second half. Bell Potter has downgraded EPS forecasts by -16.8%, -3.4% and -3.5% across FY20, FY21 and FY22 respectively.

Hold rating maintained with target price at $4.30.

The report was published on February 26, 2020.

Target price is $4.30 Current Price is $2.81 Difference: $1.49
If SLK meets the Bell Potter target it will return approximately 53% (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 17.00 cents and EPS of 22.50 cents.
At the last closing share price the estimated dividend yield is 6.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.49.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 20.00 cents and EPS of 30.90 cents.
At the last closing share price the estimated dividend yield is 7.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.09.

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

---

Canaccord Genuity rates ((SLK)) as Initiation of coverage with Buy (1) –

Reporting a solid first half, SeaLink Travel also assuaged investor concerns by clarifying the earnings impact from the recent weather and tourism-related events, the impact of which is not as severe as assumed, clarifies Canaccord Genuity.

The factors driving this news are a more resilient South Australia, positive figures for NSW and Western Australia and the carryover to the second half and less reliance on tourism and China inbound, notes the broker.

Further, states the broker, with the completion of the Transit Systems acquisition, the earnings mix has shifted towards an ‘infrastructure services’ model.

Buy rating retained with target price at $5.11.

The report was published on February 26, 2020.

Target price is $5.11 Current Price is $2.81 Difference: $2.3
If SLK meets the Canaccord Genuity target it will return approximately 82% (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 15.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.78.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 15.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.81.

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

---

E.L. & C Baillieu rates ((SLK)) as Buy (1) –

SeaLink Group reported half-yearly results with net profit after tax (pre-AASB 16) at $13.6m and operating profit (pre-AASB 16) of $26.1m versus Baillieu’s forecasted $24.6m.

The result, although generally flat, beat Baillieu’s forecasts with Captain Cook Cruises adding operating profit worth $3.8m. On the impact of bushfires and coronavirus, the group cited operating profit impact at circa -$5m in the second half.

Baillieu upgrades EPS forecasts by 22% and 7% for FY20 and FY21 respectively.

With positive factors like SeaLink’s modest assessment of the negative impact from the bushfires and coronavirus plus a decline in exposure to tourism reduction after the TSG acquisition, the broker upgrades its rating to Buy with target price at $5.

The report was published on February 26, 2020.

Target price is $5.00 Current Price is $2.81 Difference: $2.19
If SLK meets the E.L. & C Baillieu target it will return approximately 78% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

E.L. & C Baillieu forecasts a full year FY20 dividend of 15.00 cents and EPS of 25.70 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.93.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 20.00 cents and EPS of 30.20 cents.
At the last closing share price the estimated dividend yield is 7.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.30.

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

TLX    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.89

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

Wilsons expects FDA to approve Telix’s Illumet (prostate cancer imaging diagnostic kit) in the third quarter with acceleration in the prostate imaging business anticipated in FY21. Progress into Phase III therapy trials, states Wilsons, is considered an important factor over the next few years

The broker has upgraded illumet forecasts with net sales expected to exceed US$100m in FY23, partially offset by increase in R&D expenses. The broker predicts losses in FY21 but estimates a 20% increase in net profit after tax FY22.

Wilsons retains Overweight rating with target price $2.50.

The report was published on February 26, 2020.

Target price is $2.50 Current Price is $0.89 Difference: $1.61
If TLX meets the Wilsons target it will return approximately 181% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 10.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.40.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 111.25.

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

TNK    THINK CHILDCARE AND EDUCATION LIMITED

Childcare – Overnight Price: $0.62

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

Think Childcare reported an operating profit of $14.2m while operating cash flow reflected cash conversion of 125%.

Canaccord Genuity notes an increase of circa 52,000 or 7.6% in days sold in Nido-transitioned centres. Although no formal guidance from the company, the broker estimates operating profit for 2020 at $4m with estimated occupancy increase of 76% and dividend yield of 5.3%.

Buy rating maintained. Target price $1.83.

The report was published on February 26, 2020.

Target price is $1.83 Current Price is $0.62 Difference: $1.21
If TNK meets the Canaccord Genuity target it will return approximately 195% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Canaccord Genuity forecasts a full year FY20 dividend of 7.00 cents and EPS of 10.80 cents.
At the last closing share price the estimated dividend yield is 11.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.74.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 5.20 cents and EPS of 13.60 cents.
At the last closing share price the estimated dividend yield is 8.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.56.

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

WZR    WISR LIMITED

Hardware & Equipment – Overnight Price: $0.09

Moelis rates ((WZR)) as Buy (1) –

With half-yearly revenue at $2.2m, Wisr missed Moelis’s estimate of $2.4m. Driven by share-based payment expense recognition, new accounting treatment and higher employee expenses, the company reported a net loss of -$12.9m, yet again missing Moelis’s estimated -$5.4m.

The broker reduces revenue guidance for FY20-21 by -8.8% and -13.3% to $7.m and $26.8m, also decreasing profit before tax estimates to -$20.7m and -$12.4m (these are losses).

Growth initiatives undertaken are expected to generate incremental growth from the fourth quarter, according to Moelis, but the broker also states the company is doing well currently with increasing unsecured loans and transitioning to the warehouse funding model.

Buy maintained with target price decreased to $0.28 from $0.31.

The report was published on February 28, 2020.

Target price is $0.28 Current Price is $0.09 Difference: $0.19
If WZR meets the Moelis target it will return approximately 211% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.09.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.50.

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