Australian Broker Call *Extra* Edition – Aug 26, 2020

This story features ADAIRS LIMITED, and other companies. For more info SHARE ANALYSIS: ADH

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)

ADH (3)   ALU   BCI   BRG (2)   CL1   CQE   CQR   GWA   IMD   IMR   JAN (3)   KGN   LIC (2)   MAD   PPS   PXS  

ADH    ADAIRS LIMITED

Furniture & Renovation – Overnight Price: $3.40

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

Canaccord Genuity is of the view any questions surrounding Adiars' ability to navigate a shift to online have been put to rest by the company's FY20 results. The company has been able to manage disruption to its channel mix profitably.

The broker cautions FY21 may have started well but demand sustainability and the shift to online needs to be monitored. Moreover, good comps across both channels in July and the roll out of a few new stores indicate business can grow year on year.   

Canaccord Genuity retains its Buy recommendation with the target price increasing to $3.95 from $2.52.

The report was published on August 11, 2020.

Target price is $3.95 Current Price is $3.40 Difference: $0.55
If ADH meets the Canaccord Genuity target it will return approximately 16% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 15.00 cents and EPS of 26.40 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.88.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 23.50 cents and EPS of 28.80 cents.
At the last closing share price the estimated dividend yield is 6.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.81.

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

---

Goldman Sachs rates ((ADH)) as Buy (1) –

Adairs' FY20 sales and operating income were ahead of Goldman Sachs' expectations led by higher gross margins and strong operating leverage in Mocka. The company also highlighted starting FY21 on a strong note.

Earnings growth forecasts have been revised upwards for FY21-22. Even as the outlook for the next 12 months is uncertain, the broker considers Adairs is well positioned due to its strong online offering.

Goldman Sachs retains its Buy rating with the target price increasing to $3.65.

This report was published on August 10, 2020.

Target price is $3.65 Current Price is $3.40 Difference: $0.25
If ADH meets the Goldman Sachs target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 15.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.17.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 20.00 cents and EPS of 27.00 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 12.59.

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

---

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

Adairs' unaudited FY20 operating income was ahead of consensus and ex-covid-19 savings, considered by Wilsons to be a sector leading result.

The broker remains cautious on like for like sales growth in the second half of FY21 and first half of FY22, but notes catalysts in the form of market share gains, currency tailwinds and the work from home trend.

The company did not provide any FY21 guidance, but noted the year was off to a good start driven by online sales.

Wilsons upgrades its rating to Overweight from Market weight with a target price of $3.85.

The report was published on August 11, 2020.

Target price is $3.85 Current Price is $3.40 Difference: $0.45
If ADH meets the Wilsons target it will return approximately 13% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 15.00 cents and EPS of 30.20 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.26.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 20.00 cents and EPS of 31.00 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 10.97.

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

ALU    ALTIUM LIMITED

Hardware & Equipment – Overnight Price: $37.45

Goldman Sachs rates ((ALU)) as Neutral (3) –

Altium has reported underlying FY20 earnings (EBITDA) of US$70.5m, which was -2% below the Goldman Sachs forecast.

The company provided revenue and earnings guidance ranges which trigger downgrades to the broker's near-term earnings (EBITDA) forecasts, partially offset by a lower tax rate at the EPS level.

The broker notes the company remains strong in the PCB software market which has longer-term appeal. However, the analyst believes the company's re-rating potential will be limited while consensus remains in a downgrade cycle.

The Neutral rating is maintained. The target price is increased to $36.35 from $32.50.

This report was published on August 18, 2020.

Target price is $36.35 Current Price is $37.45 Difference: minus $1.1 (current price is over target).
If ALU meets the Goldman Sachs target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $35.35, suggesting downside of -5.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 62.26 cents and EPS of 62.26 cents.
At the last closing share price the estimated dividend yield is 1.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 60.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.1, implying annual growth of N/A.
Current consensus DPS estimate is 41.3, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 65.6.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 80.05 cents and EPS of 83.01 cents.
At the last closing share price the estimated dividend yield is 2.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.9, implying annual growth of 15.4%.
Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 56.8.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BCI    BC IRON LIMITED

Iron Ore – Overnight Price: $0.28

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

BC Iron’s iron ore earnings stream and strong cash position provide a strong foundation for developing its 100% owned Mardie Salt and sulphate of potash (SOP) project in Western Australia, reports Bell Potter.

The broker highlights the company combines an iron ore royalty-like business with a large scale greenfields salt and fertiliser project.

The company is expected to reach a final investment decision and receive approval for Mardie in early 2021. The broker expects financing to commence in mid-2021 with first production from 2024.

Noting the Mardie Salt and SOP project has the potential to add value, Bell Potter initiates coverage on the stock with a Buy rating and a target price of $0.47.

This report was published on August 12, 2020.

Target price is $0.47 Current Price is $0.28 Difference: $0.19
If BCI meets the Bell Potter target it will return approximately 68% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.24.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.45.

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: $28.11

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

Breville Group's FY20 revenue and operating income were both above Goldman Sachs' estimates. The broker assesses the group continues to extend its runway for growth, expanding into new geographies.

According to the broker's calculations, if Breville were to achieve even 50% of the market penetration the group has in ANZ, in the North American and European markets, its operating income potential could be 78% higher than the broker's current FY23 operating income forecast.

Goldman Sachs upgrades its rating to Buy from Neutral with the target price increased to $30.35 from $19.25.

The report was published on August 14, 2020.

Target price is $30.35 Current Price is $28.11 Difference: $2.24
If BRG meets the Goldman Sachs target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $26.79, suggesting downside of -4.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 49.00 cents and EPS of 71.00 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 39.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.7, implying annual growth of 26.1%.
Current consensus DPS estimate is 43.6, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 44.1.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 58.00 cents and EPS of 83.00 cents.
At the last closing share price the estimated dividend yield is 2.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.9, implying annual growth of 12.9%.
Current consensus DPS estimate is 49.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 39.1.

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

---

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

Breville Group reported operating income (EBIT) of $113.1m, slightly below consensus but Wilsons notes the top line was high quality with revenue up 25.3% year on year while global peers ranged from -16.6% to 8.5%.

No quantitative guidance was provided and qualitative commentary was limited as well. Management has limited visibility on regional demand profiles, reports the broker.

While encouraged by growth options, the broker believes a material premium to peers is unwarranted and maintains its Underweight recommendation with a target price of $16.90.

This report was published on August 14, 2020.

Target price is $16.90 Current Price is $28.11 Difference: minus $11.21 (current price is over target).
If BRG meets the Wilsons target it will return approximately minus 40% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $26.79, suggesting downside of -4.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 42.50 cents and EPS of 61.50 cents.
At the last closing share price the estimated dividend yield is 1.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.7, implying annual growth of 26.1%.
Current consensus DPS estimate is 43.6, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 44.1.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 42.50 cents and EPS of 66.70 cents.
At the last closing share price the estimated dividend yield is 1.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.9, implying annual growth of 12.9%.
Current consensus DPS estimate is 49.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 39.1.

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

CL1    CLASS LIMITED

Cloud services – Overnight Price: $1.96

Wilsons rates ((CL1)) as Downgrade to Market Weight from Overweight (3) –

Class' results were strong, observes Wilsons, led by the core Class Super offering. The company has guided to revenue of $53m, up 20%, with underlying operating margin of more than 39.6% versus Wilsons' 41.2%.

Class considers the industry is highly fragmented and "ripe for consolidation” and the broker takes this to mean there may be M&A activity going ahead.

FY21 may be a game-changer with the company establishing credibility in Class Trust which could create momentum into FY22, comments the broker. Wilsons downgrades its rating to Market Weight from Overweight with a target price of $2.11.

This report was published on August 14, 2020.

Target price is $2.11 Current Price is $1.96 Difference: $0.15
If CL1 meets the Wilsons target it will return approximately 8% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 5.00 cents and EPS of 6.20 cents.
At the last closing share price the estimated dividend yield is 2.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.61.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 5.00 cents and EPS of 7.60 cents.
At the last closing share price the estimated dividend yield is 2.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.79.

Market Sentiment: 1.0
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: $2.62

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

Canaccord Genuity notes Charter Hall Social Infrastructure REIT delivered another "solid set of earnings". The REIT's guidance points towards a positive earnings outlook with distribution guidance for 15c.

This is above the broker's previous estimate and implies the business is operating in fairly normal conditions.

Given the REIT's high level of tenant occupancy, long weighted average lease expiry and an expected dividend yield of 6.0% in FY21, Canaccord Genuity maintains its Buy recommendation with a price target of $2.79.

The report was published on August 11, 2020.

Target price is $2.79 Current Price is $2.62 Difference: $0.17
If CQE meets the Canaccord Genuity target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 15.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 5.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.47.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 16.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 6.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.41.

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

CQR    CHARTER HALL RETAIL REIT

REITs – Overnight Price: $3.33

Moelis rates ((CQR)) as Reinstates coverage with Buy (1) –

Charter Hall Retail REIT reported FY20 funds from operations (FFO) of 30.56c or 28.4c when adjusted for covid-19. The distribution was 24.52c, implying 100% adjusted funds from operations (AFFO). 

Moelis reinstates coverage with a Buy rating and target price of $3.65.

The broker notes the REIT is trading at a discount to net tangible asset which reflects uncertainty around the strategic direction of the recent acquisitions.

The REIT remains an attractive value proposition, states the broker, supported by its defensive income stream and attractive distribution yield.

Target price is $3.65 Current Price is $3.33 Difference: $0.32
If CQR meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $3.37, suggesting upside of 1.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 22.60 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 6.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.2, implying annual growth of 166.4%.
Current consensus DPS estimate is 23.0, implying a prospective dividend yield of 6.9%.
Current consensus EPS estimate suggests the PER is 13.2.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 24.40 cents and EPS of 27.20 cents.
At the last closing share price the estimated dividend yield is 7.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.2, implying annual growth of 4.0%.
Current consensus DPS estimate is 24.7, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 12.7.

Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

GWA    GWA GROUP LIMITED

Furniture & Renovation – Overnight Price: $2.57

Goldman Sachs rates ((GWA)) as Buy (1) –

GWA Group reported earnings (EBIT) -8% below the Goldman Sachs forecast, with the fourth quarter decline in activity worse than anticipated.

The broker suggests the company remains well positioned to benefit as cost-out programs remain on track, the balance sheet is robust, the company's market shares suggest no loss of market leadership and de-stocking activity in FY20 suggests a turn in the cycle should benefit the company quickly.

Goldman Sachs cuts both FY21 and FY22 EPS forecasts by -11%. The Buy rating is maintained. The target price is decreased to $2.90 from $3.25.

This report was published on August 17, 2020.

Target price is $2.90 Current Price is $2.57 Difference: $0.33
If GWA meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $2.62, suggesting upside of 1.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 11.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 4.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.7, implying annual growth of -11.4%.
Current consensus DPS estimate is 9.9, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 17.5.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 14.00 cents and EPS of 17.00 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 15.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.0, implying annual growth of 8.8%.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 16.1.

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

IMD    IMDEX LIMITED

Mining Sector Contracting – Overnight Price: $1.23

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

Imdex has delivered a "resilient" FY20 result with underlying earnings (EBITDA) and underlying (NPATA) slightly below Bell Potter's estimates due to a higher depreciation charge.

The company had achieved record revenues up to March, until covid-19 disruptions caused revenue and earnings to fall, with the Americas business the most impacted and the APAC most resilient, points out the broker.

The company has booked $27.1m of patent and license intangibles from the Fkexidrill acquisition that will be amortised, hence the broker's preferred financial profit metric going forward will be NPAT less acquired intangible amortisation or NPATA.

Bell Potter says continued easing of pandemic restrictions and several lead indicators suggest an improved outlook, although this is currently fairly priced in the market.

The Hold rating is maintained. The target price is increased to $1.38 from $1.33.

This report was published on August 17, 2020.

Target price is $1.38 Current Price is $1.23 Difference: $0.15
If IMD 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 FY21:

Bell Potter forecasts a full year FY21 dividend of 1.90 cents and EPS of 4.50 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 27.33.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 3.60 cents and EPS of 7.30 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.85.

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

IMR    IMRICOR MEDICAL SYSTEMS INC

Medical Equipment & Devices – Overnight Price: $1.70

Moelis rates ((IMR)) as Buy (1) –

Imricor Medical Systems will be entering a 3-year distribution deal with Philips for the sale of its capital equipment across Europe. Moelis is pleased with this development.

The broker reports lab roll-out is continuing with three more sites expected to sign contracts soon. Moreover, there are 14 more sites in the third stage of the company's five-stage sales progress supporting.

Moelis sees a very large addressable market and reinstates its Buy rating with a target price of $2.61.

This report was published on August 11, 2020.

Target price is $2.61 Current Price is $1.70 Difference: $0.91
If IMR meets the Moelis target it will return approximately 54% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY20:

Moelis forecasts a full year FY20 dividend of 0.00 cents and EPS of minus 12.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.93.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 10.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.83.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
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: $0.39

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

Janison Education's FY20 result was mostly in line with Bell Potter's expectations with recurring revenue up 22% versus last year. Gross margins continued to improve, up 46% led by a change in sales mix.

The operating cash flow at $7.5m, was the key highlight of the result, says the broker.

For FY21, management has simply guided to a favourable outlook. The broker notes covid-19 is forcing educational institutions to shift online and the company remains in a strong position to benefit from this.

Even with digital learning markets facing tailwinds, the broker feels the stock faces downside risk to short term earnings and downgrades its rating to Hold from Buy with a target price of $0.40.

This report was published on August 12, 2020.

Target price is $0.40 Current Price is $0.39 Difference: $0.01
If JAN meets the Bell Potter target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

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 97.50.

Forecast for FY22:

Bell Potter forecasts a full year FY22 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 65.00.

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

---

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

Looking at the current environment, FY20 was a solid year for Janison Education Group, observes the broker. Revenue and gross profit were both ahead of the broker's forecasts.

The group's FY21 outlook is considered favourable with expansion expected in revenue, gross margin, operating income and cash flow. CCZ Equities' forecasts remain broadly unchanged with FY21 revenue reduced by -$1.9m due to the impact of the longer than expected lockdown.

The FY20 result has reinforced the broker's view the investment made into developing a scalable assessment platform will result in significant uplifts in revenue with relatively stable fixed costs. CCZ Equities reaffirms its Buy rating with the target price increasing to $0.47 from $0.39.

This report was published on August 13, 2020.

Target price is $0.47 Current Price is $0.39 Difference: $0.08
If JAN meets the CCZ Equities target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

CCZ Equities 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 48.75.

Forecast for FY22:

CCZ Equities forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 130.00.

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

---

Moelis rates ((JAN)) as Initiation of coverage with Buy (1) –

Moelis initiates coverage of Janison Education Group with a Buy and price target of $0.49.

The group engages in licensing, hosting and supporting online student assessment and e-learning software solutions in Australia and internationally. The company operates in two segments, Assessment and Learning.

Moelis suggests FY20 was a transitional year for the group as it moves toward wider global commercialisation of the Janison Insights platform with the business entering FY21 with several growth initiatives.

The broker highlights many key drivers for the business including ongoing acceleration of digitisation trends, the D2L (global software company) partnership expected to generate revenue and the restart of examinations including NAPLAN.

This report was published on August 13, 2020.

Target price is $0.49 Current Price is $0.39 Difference: $0.1
If JAN meets the Moelis target it will return approximately 26% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 65.00.

Forecast for FY22:

Moelis forecasts a full year FY22 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 195.00.

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

KGN    KOGAN.COM LTD

Retailing – Overnight Price: $21.19

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

Kogan.com reported FY20 sales and earnings (EBITDA) which were in-line with Canaccord Genuity forecasts.

The broker explains the company's Exclusive Brands/Private Label divisions were the largest contributors to Kogan's gross profit growth as revenues increased coupled with a material uplift in divisional gross profit margins, that resulted in gross profit increasing 44% to $64.9m compared to FY19.

The company's Marketplace also accelerated strongly, with the expectation this will be the primary sales/earnings growth driver in the medium-term. The broker lifts FY21 and FY22 earnings (EBITDA) by 11% and 6%, respectively.

Canaccord Genuity states the company has the potential to deliver a material increase in earnings in FY21, that could be complemented by strategic acquisitions.

The Buy rating is maintained. The target price is increased to $24 from $22.

This report was published on August 18, 2020.

Target price is $24.00 Current Price is $21.19 Difference: $2.81
If KGN meets the Canaccord Genuity target it will return approximately 13% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 36.00 cents and EPS of 51.00 cents.
At the last closing share price the estimated dividend yield is 1.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.55.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 41.00 cents and EPS of 59.00 cents.
At the last closing share price the estimated dividend yield is 1.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.92.

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

LIC    LIFESTYLE COMMUNITIES LIMITED

Aged Care & Seniors – Overnight Price: $9.14

Canaccord Genuity rates ((LIC)) as Downgrade to Hold from Buy (3) –

Lifestyle Communities surprised Canaccord Genuity on the upside with its FY20 result with settlements and resales higher than expected, as were home sales.

Operating metrics continued to improve with a build up in cashflow and growth in the settled homes in the portfolio, notes the analyst, who also highlights the increased margin on recurring revenue to 52% from 50%.

A final dividend of 2.5 cents was declared.

The broker notes the near-term outlook remains somewhat clouded with the Melbourne lockdown (making new sales and settlements challenging), which explains management opting to provide a longer-term settlement guidance range of 900-1,000 homes between FY21-FY23.

The broker downgrades the rating to Hold from Buy. The target price is increased to $8.00 from $7.50.

The report was published on August 12, 2020.

Target price is $8.00 Current Price is $9.14 Difference: minus $1.14 (current price is over target).
If LIC meets the Canaccord Genuity target it will return approximately minus 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity forecasts a full year FY21 dividend of 6.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 0.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.39.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 7.00 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 0.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.44.

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

---

Goldman Sachs rates ((LIC)) as Buy (1) –

Lifestyle Communities reported FY20 underlying profit (NPAT) that was 16% above Goldman Sachs' (GS) forecast. The analyst notes the key reasons for the beat were settlement of 253 homes versus 235 for GS and resale of existing homes of 80 versus 60 for GS.

No near-term guidance was provided, but management has commented that 900-1,000 homes are expected to be settled over the next three years, which the analyst believes is conservative.

The broker highlights a strong pipeline of 257 homes sold but not settled. Goldman Sachs maintains the Buy rating. The target price is increased to $11.80 from $10.60.

This report was published on August 13, 2020.

Target price is $11.80 Current Price is $9.14 Difference: $2.66
If LIC meets the Goldman Sachs target it will return approximately 29% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 6.00 cents and EPS of 63.00 cents.
At the last closing share price the estimated dividend yield is 0.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.51.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 8.00 cents and EPS of 83.00 cents.
At the last closing share price the estimated dividend yield is 0.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.01.

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

MAD    MADER GROUP LIMITED

Mining Sector Contracting – Overnight Price: $0.84

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

Mader Group's FY20 unaudited results were at the top end of its guidance range with revenues in line with Bell Potter's forecast.

The group expects revenue and earnings growth to continue in FY21, driven by iron ore and gold customers and penetration into the US market, reports the broker.

Disruptions caused by workforce issues and extra costs on account of covid-19 are expected to dissipate in FY21. As the stock continues to look undervalued, the broker retains its Buy rating with the target price increasing to $1.22 from $1.18.

This report was published on August 11, 2020.

Target price is $1.22 Current Price is $0.84 Difference: $0.38
If MAD meets the Bell Potter target it will return approximately 45% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 5.19 cents and EPS of 14.23 cents.
At the last closing share price the estimated dividend yield is 6.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.90.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 3.80 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 4.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.18.

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

PPS    PRAEMIUM LIMITED

Wealth Management & Investments – Overnight Price: $0.52

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

Praemium delivered a strong FY20 result, comments Canaccord Genuity, driven by better-than-expected 2H20 earnings (EBITDA).

Canaccord Genuity sees this as a pleasing outcome, given the adverse impact on markets during the June quarter as a result of both covid-19 and having to absorb around -1.5bn in funds under administration (FUA) outflows in relation to a transitional client outflow that totaled -$2.2bn for the period.

The broker sees positive earnings momentum continuing and highlights an investment in front end sales and around $10m on platform capability over the past two years provides significant earnings leverage to FUA growth 

Canaccord Genuity lifts normalised EPS forecasts by 10% for both FY21 and FY22. The Buy rating is maintained. The target price is increased to $0.78 from $0.75.

This report was published on August 16, 2020.

Target price is $0.78 Current Price is $0.52 Difference: $0.26
If PPS meets the Canaccord Genuity target it will return approximately 50% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Canaccord Genuity 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 26.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.33.

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

PXS    PHARMAXIS LTD

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.11

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

Pharmaxis' noted no material change in its FY20 results. Bell Potter estimates the current cash reserves of $14.8m provide circa 12 months runway ahead of the boost expected from the licensing deal for LOXL-2.

The broker did not find a lot of new information in the financials versus the unaudited numbers released a few weeks earlier. Earnings forecasts remain unchanged.

Bell Potter retains its Buy rating with a target price of $0.20. 

This report was published on August 13, 2020.

Target price is $0.20 Current Price is $0.11 Difference: $0.09
If PXS meets the Bell Potter target it will return approximately 82% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.00.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.40.

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