Australian Broker Call *Extra* Edition – Jul 20, 2020

This story features ADACEL TECHNOLOGIES LIMITED, and other companies. For more info SHARE ANALYSIS: ADA

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)

ADA   AGH   APE   BSA   CHN   DTC   EGN   KZA   LOV   MAQ   MVP (2)   MYX   OPT   PNI   PSQ (2)   SHV   SND   WTC  

ADA    ADACEL TECHNOLOGIES LTD

Software & Services – Overnight Price: $0.51

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

Adacel Technologies has provided increased guidance for profits.

The broker assumes that the company's upgrade of earnings derives from the pull forward of installations, so these earnings should reverse in the subsequent year.

The cash balance of approximately $5m was higher than the $1.5m forecast by Bell Potter.

The broker upgrades FY20 earnings forecasts by 42%, but downgrades FY21 earnings forecasts by -15%.

Buy rating maintained. Target price is increased to $0.80 from $0.75.

This report was published on July 7, 2020.

Target price is $0.80 Current Price is $0.51 Difference: $0.29
If ADA meets the Bell Potter target it will return approximately 57% (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 2.00 cents and EPS of 2.00 cents.
At the last closing share price the estimated dividend yield is 3.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.50.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 3.00 cents and EPS of 5.50 cents.
At the last closing share price the estimated dividend yield is 5.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.27.

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

AGH    ALTHEA GROUP HOLDINGS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.36

PhillipCapital rates ((AGH)) as Accumulate (2) –

Althea Group owns licences to import, cultivate, produce and supply medicinal cannabis for eligible patients across Australia. The company is now expanding to the UK, Canada and Germany.

The company's subsidiary in Canada has announced its first customer.

However, both Canada and Germany are awaiting a licence and sales permit, respectively. Both are imminent according to the analyst.

Off a low base, patient consultations are up 50% in the UK, while strong demand is continuing in Australia.

Phillip Capital likes the large market potential and the local partnering approach in Germany, and is growing more optimistic on Canada.

The Accumulate rating is unchanged. The price target of $0.57 is unchanged. (This is a 24-month price target – as the broker wants to allow time for the company to show traction) 

This report was published on June 30, 2020.

Target price is $0.57 Current Price is $0.36 Difference: $0.21
If AGH meets the PhillipCapital target it will return approximately 58% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

PhillipCapital forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 7.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.86.

Forecast for FY21:

PhillipCapital forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.86.

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

APE    AP EAGERS LIMITED

Automobiles & Components – Overnight Price: $6.19

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

Bell Potter points to new vehicle sales in June, that were stronger than industry predictions and suggests the overall decline has been decreasing over the last  three months.

However, the broker notes that these stronger sales, combined with factory shutdowns in April and May, suggest an upcoming shortage of stock. This is likely to persist for several months. In turn, this will keep new vehicle sales lower for several months, according to the analyst.

Bell Potter makes no changes to forecasts for A.P. Eagers.

Buy rating is maintained. The target price is $8.00.

This report was published on July 07, 2020.

Target price is $8.00 Current Price is $6.19 Difference: $1.81
If APE meets the Bell Potter target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $7.85, suggesting upside of 26.8%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 7.50 cents and EPS of 20.60 cents.
At the last closing share price the estimated dividend yield is 1.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.1, implying annual growth of N/A.
Current consensus DPS estimate is 9.1, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 29.3.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 12.50 cents and EPS of 37.00 cents.
At the last closing share price the estimated dividend yield is 2.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.2, implying annual growth of 76.3%.
Current consensus DPS estimate is 23.0, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 16.6.

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

BSA    BSA LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.34

PhillipCapital rates ((BSA)) as Buy (2) –

BSA has issued a trading and guidance update for FY20.

Revenue is expected in the range of $475m-$485m and earnings in the range of $22m-$23m.

Phillip Capital downgrades EPS forecasts by -11%, -10% and -11% for FY20-22.

The Telecommunications and Firebuild divisions are remaining resilient. However, the Maintain division is seeing a deferral of discretionary work. It should be noted this division only accounted for 17% of FY19 earnings, according to the analyst.

The company is assessing inorganic merger and acquisition opportunities.

Phillip Capital believes there are multiple catalysts for upgrades via acquisitions, capital management and major NBN and 5G contracts approaching.

The Accumulate rating is maintained. The price target is increased to $0.31 from $0.28.

This report was published on June 29, 2020.

Target price is $0.31 Current Price is $0.34 Difference: minus $0.03 (current price is over target).
If BSA meets the PhillipCapital target it will return approximately minus 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY20:

PhillipCapital forecasts a full year FY20 dividend of 1.00 cents and EPS of 1.70 cents.
At the last closing share price the estimated dividend yield is 2.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

Forecast for FY21:

PhillipCapital forecasts a full year FY21 dividend of 1.10 cents and EPS of 2.30 cents.
At the last closing share price the estimated dividend yield is 3.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.78.

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

CHN    CHALICE GOLD MINES LIMITED

Industrial Metals – Overnight Price: $1.06

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

Chalice Gold Mines is a Perth based exploration company focused on base and precious metals. The strategy is to target Tier-1 scale mineral projects and to undertake high impact activity on its projects.

The company’s assets comprise of the Julimar project in Western Australia and the Pyramid Hill gold project in Central Victoria. The company also owns the King Leopold Nickel project in Western Australia along with seven other minor projects also in Western Australia and Queensland.

The early exploration activities at the Julimar project led to the discovery of high-grade deposits of palladium, nickel, copper, cobalt and platinum while gold deposits were found at the company’s Pyramid Hill gold project in another important discovery. 

The broker considers these two discoveries to be of profound importance and expects the company to lift exploration spending to at least $10-15m per year.

The strong financial position of the miner will enable it to conduct comprehensive exploration programs at both the projects. The broker expects more upside potential to valuation depending on if more deposits are found at these two sites. 

Bell Potter initiates coverage on Chalice Gold Mines with a Speculative Buy recommendation and a valuation of $1.30 per share.

This report was published on July 9, 2020.

Target price is $1.30 Current Price is $1.06 Difference: $0.24
If CHN meets the Bell Potter target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.00.

Forecast for FY21:

Bell Potter forecasts a full year FY21 EPS of 4.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.04.

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

DTC    DAMSTRA HOLDINGS LIMITED

Software & Services – Overnight Price: $1.55

Shaw and Partners rates ((DTC)) as Buy (1) –

Damstra Holdings, founded in 2002 and headquartered in South Yarra, provides workplace management solutions. 

The company ended FY20 ahead of Shaw and Partners expectations with revenues up 44% at $22.1m and the broker has upgraded core business estimates by about 8% for FY21.

The company recently announced the acquisition of Vault Intelligence ((VLT)), a workforce management and performance SAAS business, for circa $59m.

The broker states Vault’s products will improve the value proposition and cites its Solo remote product as an example, which will likely be in demand with Damstra Holdings’ blue-chip customer suite.

After Vault, Shaw and Partners expects Damstra Holdings to target acquisitions in the US and Europe next. Revenue forecasts increased for FY21-23 while the earnings forecast was upgraded by 10% for FY22.

Shaw and Partners maintains its Buy rating with a target price of $1.80.

This report was published on July 9, 2020.

Target price is $1.80 Current Price is $1.55 Difference: $0.25
If DTC meets the Shaw and Partners target it will return approximately 16% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Shaw and Partners 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 387.50.

Forecast for FY21:

Shaw and Partners 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 119.23.

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

EGN    ENGENCO LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.48

PhillipCapital rates ((EGN)) as Buy (2) –

Engenco released a business update, including its business response to covid-19. Phillip Capital now forecasts $3.6m pre-tax profit for 2H20 and $7.1m for the full year.

As most of the company's businesses revolve around Transport, Logistics, Resources and Defence industries, the company says demand has been largely unaffected.

The broker remains upbeat on possibilities for new contracts and joint ventures or acquisitions. The Accumulate rating is maintained. The target price is increased to $0.50 from $0.47.

This report was published on June 29, 2020.

Target price is $0.50 Current Price is $0.48 Difference: $0.02
If EGN meets the PhillipCapital target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

PhillipCapital forecasts a full year FY20 dividend of 1.50 cents and EPS of 2.30 cents.
At the last closing share price the estimated dividend yield is 3.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.87.

Forecast for FY21:

PhillipCapital forecasts a full year FY21 dividend of 2.00 cents and EPS of 3.20 cents.
At the last closing share price the estimated dividend yield is 4.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.00.

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

KZA    KAZIA THERAPEUTICS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.50

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

Kazia Therapeutics is the developer of a new chemical entity called paxalisib, specifically designed for the treatment of Glioblastoma (GBM).

The drug is unlikely to be a cure for Glioblastoma, but clinical data suggests it is effective in prolonging life with acceptable risk.

A phase ll clinical trial is fully recruited and Kazia has sufficient funding until at least the the next interim update in early 2021.

The drug is being examined in other investigator sponsored studies for alternative uses in treating childhood brain cancers and brain metastases from other primary tumours.

Kazia has also been invited to join the platform study GBM agile. The next milestone for the company is the enrollment of first patients in this study.

Initiation of coverage with a Buy (Speculative) rating. Target price $1.00.

This report was published on July 03, 2020.

Target price is $1.00 Current Price is $0.50 Difference: $0.5
If KZA 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 12.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.88.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 11.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.20.

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

LOV    LOVISA HOLDINGS LIMITED

Luxury – Overnight Price: $6.25

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

Lovisa Holdings provided an update on trading and operations. With all stores worldwide now reopened, the company was able to exceed the brokers sales forecasts.

At the end of FY20, Lovisa had $21m in net cash and $44m of undrawn financing facilities.

Bell Potter believes that, despite earnings uncertainties, the strong balance sheet will enable the company to endure the pandemic and achieve long-term growth prospects.

Buy rating is maintained. The price target increased to $7.50 from $6.80.

This report was published on July 07, 2020.

Target price is $7.50 Current Price is $6.25 Difference: $1.25
If LOV meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $6.60, suggesting upside of 5.6%(ex-dividends)
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 17.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.8, implying annual growth of -40.7%.
Current consensus DPS estimate is 3.8, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 30.0.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 20.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 3.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.2, implying annual growth of 11.5%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 26.9.

Market Sentiment: 0.0
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: $46.45

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

Bell Potter initiates coverage of Macquarie Telecom Group with a Buy rating and a price target of $51.25.

The company provides a range of services for corporate customers and a dedicated government division provides secure cloud, colocation and cyber security services for the Federal, NSW and Victorian governments.

The co-founders hold a 56.1% interest, which the broker believes ensures a long-term focus.

The transition over time has been to higher growth Hosting services and away from its Telecom roots.

The broker expects significant value creation for many years and the next growth avenue to come from investments in cloud and colocation services, to take advantage of the corporate and government trend toward digitisation of the workplace.

Initiation of coverage with a Buy. Price target is $51.25.

This report was published on July 03, 2020.

Target price is $51.25 Current Price is $46.45 Difference: $4.8
If MAQ meets the Bell Potter target it will return approximately 10% (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 66.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 69.95.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 43.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 107.27.

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

MVP    MEDICAL DEVELOPMENTS INTERNATIONAL LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $6.22

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

Bell Potter believes that the pandemic has delayed the approval process for Penthrox in America by twelve months and in China by six months.

The broker also expects a delay in the rollout of Penthrox (used in emergency or procedural pain relief) in the EU, which delays the timing of a $5m milestone payment from Mundipharma.

However, Bell Potter forecasts that Medical Development's respiratory business is likely to remain resilient during covid-19, and will likely offset declines in both Penthrox and the vet business going forward.

Buy rating is maintained. The target price decreased to $8.97 from $11.36.

The report was published on July 7, 2020.

Target price is $8.97 Current Price is $6.22 Difference: $2.75
If MVP meets the Bell Potter target it will return approximately 44% (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 4.00 cents and EPS of 0.70 cents.
At the last closing share price the estimated dividend yield is 0.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 888.57.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 2.00 cents and EPS of 0.90 cents.
At the last closing share price the estimated dividend yield is 0.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 691.11.

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

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PhillipCapital rates ((MVP)) as Downgrade to Accumulate from Buy (2) –

While excited by the long-term prospects for Medical Developments International, Phillip Capital is concerned about the covid-19 impact on the company.

The demand for Penthrox (the emergency pain relief device and methoxyflurane drug) has been subdued by the decline in traffic numbers and restrictions on sport and unessential activities. New country approvals and ramp-up have also been delayed.

The broker cites the recent rally in the share price as a further reason to downgrade the rating to Accumulate from Buy. The price target is unchanged at $7.80.

The report was published on June 30, 2020.

Target price is $7.80 Current Price is $6.22 Difference: $1.58
If MVP meets the PhillipCapital target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

PhillipCapital forecasts a full year FY20 dividend of 3.00 cents and EPS of minus 0.10 cents.
At the last closing share price the estimated dividend yield is 0.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6220.00.

Forecast for FY21:

PhillipCapital forecasts a full year FY21 dividend of 3.00 cents and EPS of minus 0.10 cents.
At the last closing share price the estimated dividend yield is 0.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6220.00.

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

MYX    MAYNE PHARMA GROUP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.42

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

Mayne Pharma develops, manufactures and distributes generic and branded pharmaceuticals. The company recently announced a new supply agreement with the Chinese manufacturer Novast Laboratories to supply oral contraceptives.

Bell Potter expects more favourable terms with Novast Laboratories than with the previous contract manufacturing organisation (TEVA) and thinks the company may be able to get back some of its lost market share in oral contraceptives.

The company will also be adding Nuvaring – an IUD – to its generic women’s health portfolio and is awaiting approval of its first branded oral contraceptive.

Bell Potter holds onto its Buy rating with a target price of $0.55.

This report was published on July 9, 2020.

Target price is $0.55 Current Price is $0.42 Difference: $0.13
If MYX meets the Bell Potter target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $0.42, suggesting upside of 0.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 EPS of 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.2, 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:

Bell Potter forecasts a full year FY21 EPS of 4.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.4, 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 30.0.

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

OPT    OPTHEA LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $2.25

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

Opthea is developing and commercialising novel biological therapies to treat diseases of the eye. The lead drug is OPT-302, which recently completed a Phase llA trial in diabetic macular edema (DME).

A subgroup of patients were treated with an existing drug not owned by Opthea, named ELYEA. If that subgroup is treated with a combination of OPT-302/ELYEA, the outcomes are far superior. As a result of some independent verification, Wilsons believes this trend may resonate with specialists and support a Phase llB trial.

Wilsons valuation assumes another $50m capital raising in FY22. However, this will not be required should current rumours of Opthea announcing a major strategic partnership prove true. The broker believes this prospect has supported the current share price.

Overweight rating is maintained. Target price is $4.85.

This report was published on July 06, 2020.

Target price is $4.85 Current Price is $2.25 Difference: $2.6
If OPT meets the Wilsons target it will return approximately 116% (excluding dividends, fees and charges).
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 10.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.03.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 6.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.61.

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: $4.46

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

Wilsons reinitiates coverage of Pinnacle Investment with an Overweight rating and a target price of $5.00.

Pinnacle derives earnings from management and performance fees. There are 16 affiliate investment management funds of which seven have global equities strategies. This is significant, as the broker expects medium-term growth to come from international expansion. Longer-term growth will be generated by growing non-equities asset classes.

Traditionally, Pinnacle has traded at a 76% premium to listed peers. Wilsons valuation reflects a premium of 119%, as 15% of the FUM is exposed to growth strategies with greater upside than its peers.

Wilsons has an Overweight rating, while the target price has decreased to $5.00 from $6.12, after reinitiating coverage.

This report was published on July 03, 2020.

Target price is $5.00 Current Price is $4.46 Difference: $0.54
If PNI meets the Wilsons target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $5.12, suggesting upside of 14.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 12.20 cents and EPS of 14.40 cents.
At the last closing share price the estimated dividend yield is 2.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.0, implying annual growth of -12.6%.
Current consensus DPS estimate is 15.9, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 27.9.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 12.70 cents and EPS of 14.90 cents.
At the last closing share price the estimated dividend yield is 2.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.6, implying annual growth of -2.5%.
Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 28.6.

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

PSQ    PACIFIC SMILES GROUP LIMITED

Healthcare services – Overnight Price: $1.56

Bell Potter rates ((PSQ)) as Upgrade to Buy from Hold (1) –

Pacific Smiles Group has signed a managed services agreement with the private insurer HBF for a ten-year base term under which it will build at least five HBF Dental Clinics in Western Australia in the next 18 months.

Bell Potter highlights the group will not own these HBF centres and will not bear any capital expenditure or in-clinic running costs.

Its cost outlay will be restricted to managing the centres, liaising with medical practitioners and getting a share of patient fees in return.

The incremental net income from this HBF arrangement is estimated by the broker at $0.5m in FY22, expected to ramp up to $2.2m and will be an additional revenue stream for the group, increasing margin expansion.

Earnings forecasts for FY20-21 remain unchanged while upgraded by circa 3% for FY22 due to the inclusion of net earnings from the HBF arrangement.

Bell Potter upgrades its rating to Buy from Hold with the target price increased to $1.75 from $1.65.

This report was published on July 9, 2020.

Target price is $1.75 Current Price is $1.56 Difference: $0.19
If PSQ 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 2.40 cents and EPS of 4.90 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.84.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 5.10 cents and EPS of 5.10 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.59.

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

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

Wilsons states that Pacific Smiles Group provided FY20 guidance and balance sheet metrics are well in excess of the broker's forecasts.

The company announced same store patient fee growth of 7% and the expectation for $185.8m in gross fees for FY20.

The broker expects a return to the rollout of 8-10 centres per year.

Anecdotal evidence suggests to Wilsons that the company's rebound is outperforming 'small private practice' dentistry. With competitive pressures on a low and rental expenses subdued, now is potentially a great time to be in expansion mode.

Existing practices are commissioning new chairs to backfill spare capacity in existing centres. Wilsons believes this is a strong leading indicator of trading conditions.

Overweight rating is retained. Target price is increased to $2.00 from $1.65.

This report was published on July 06, 2020.

Target price is $2.00 Current Price is $1.56 Difference: $0.44
If PSQ meets the Wilsons target it will return approximately 28% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 2.40 cents and EPS of 4.90 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.84.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 3.90 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 2.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.00.

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

SHV    SELECT HARVESTS LIMITED

Agriculture – Overnight Price: $5.78

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

With harvest now complete, Bell Potter notes early conditions for Select Harvests’ FY21 crop are good. 

There is price pressure on the crop due to covid-19 induced supply chain disruptions and expansion of Californian supply, points out the broker. This has led to a material downward correction in the almond price since February 2020.

Accordingly, the broker has reduced net profit forecasts for FY20-22. 

While the broker considers the company to be a growth-through-the-cycle story, it struggles to see any positive near-term catalysts, noting the almond price is the most key fluid variable, and currently under pressure.

Bell Potter downgrades its rating to Hold from Buy with the target decreasing to $6.10 from $8.

This report was published on July 9, 2020.

Target price is $6.10 Current Price is $5.78 Difference: $0.32
If SHV meets the Bell Potter target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in September.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 13.00 cents and EPS of 28.10 cents.
At the last closing share price the estimated dividend yield is 2.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.57.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 17.00 cents and EPS of 33.00 cents.
At the last closing share price the estimated dividend yield is 2.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.52.

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

SND    SAUNDERS INTERNATIONAL LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.61

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

Taylor Collison believes that Saunders International will increase market share due to a strong workflow and order book, as well as a weakened competitive landscape.

The broker maintains that the company should be a beneficiary of increased fiscal expenditure, particularly in the infrastructure space. Additionally, the analyst is optimistic about the medium-term contribution to earnings by the non-cyclical divisions of the company.

The broker estimates FY20 revenue of $68.9m and EBIT of $1.4m and expects the FY21 reintroduction of a dividend (the first since 1H18).

Outperform rating is maintained. No target price is estimated.

This report was published on June 29, 2020

Current Price is $0.61. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY20:

Taylor Collison forecasts a full year FY20 dividend of 0.00 cents and EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.00.

Forecast for FY21:

Taylor Collison forecasts a full year FY21 dividend of 0.60 cents and EPS of 3.20 cents.
At the last closing share price the estimated dividend yield is 0.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.06.

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

WTC    WISETECH GLOBAL LIMITED

Cloud services – Overnight Price: $20.65

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

WiseTech Global announced completing earnout re-negotiations on five of its acquisitions.

Bell Potter notes the impact from these re-negotiations is much less than the initial impact announced in May with equity issuance at $10.4m rather than the expected $81.4m.

These earnout changes will lead to a one-off fair value gain of $8.1m which will be recognised in the FY20 result, reports the broker and notes the company does not anticipate any goodwill impairment from these changes.

The broker’s FY20 forecasts remain consistent with the company’s revenue and operating income guidance, albeit on the lower side.

Bell Potter maintains its Sell rating with the target price increasing to $18.75 from $17.50.

This report was published on July 9, 2020.

Target price is $18.75 Current Price is $20.65 Difference: minus $1.9 (current price is over target).
If WTC meets the Bell Potter target it will return approximately minus 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $22.20, suggesting upside of 7.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY20:

Bell Potter forecasts a full year FY20 dividend of 3.20 cents and EPS of 15.40 cents.
At the last closing share price the estimated dividend yield is 0.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 134.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.6, implying annual growth of 16.4%.
Current consensus DPS estimate is 3.6, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 100.2.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 4.40 cents and EPS of 22.50 cents.
At the last closing share price the estimated dividend yield is 0.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 91.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.7, implying annual growth of 34.5%.
Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 74.5.

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

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