Australian Broker Call *Extra* Edition – Sep 25, 2020

This story features AVITA MEDICAL INC, and other companies. For more info SHARE ANALYSIS: AVH

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)

ALG   AVH (2)   BGA   CAJ   CGC   CUP   CXL   EVS   FWD   GNX   GTN   HSN   HUO   LLC   MTO   NSR   NXT (2)   OBL   OPT   PKS   QHL   QIP   VRL  

ALG    ARDENT LEISURE GROUP

Travel, Leisure & Tourism – Overnight Price: $0.50

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

Ardent Leisure Group reported group revenue slightly less than forecast by EL &C Baillieu.

The broker describes it as a messy result with a range of one-off items related to asset revaluations and restructuring costs. One highlight for the analyst is the company has identified over -$20m in annual cost reductions across all businesses to flow from FY21.

The Buy rating is unchanged and is based on Baillieu’s combination of valuation and the re-opening of all assets with a materially reduced cost base.

The target price is decreased to $0.70 from $0.75.

This report was published on August 28, 2020.

Target price is $0.70 Current Price is $0.50 Difference: $0.2
If ALG meets the E.L. & C Baillieu target it will return approximately 40% (excluding dividends, fees and charges).
Current consensus price target is $0.85, suggesting upside of 69.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 13.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -9.3, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

E.L. & C Baillieu forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 10.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -7.6, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

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

AVH    AVITA THERAPEUTICS, INC

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $7.50

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

Avita Therapeutics released its maiden result as a US domiciled entity. The company now reports exclusively in US dollars.

The company released a loss (EBIT) that was significantly higher than expected by Bell Potter. This was considered partly due to an increase in the non-cash, share-based remuneration charge. Additionally, the loss was partly due to a shortfall of reimbursement income related to Biomedical Advanced Research and Development Authority (BARDA), notes the broker.

The analyst increases the FY21 net loss after tax estimate to -US$42m from -US$22m, mostly attributable to the inclusion of a large increase in stock-based remuneration (which will be an ongoing item).

The Buy rating is unchanged and the target price is decreased to $15 from $16.

This report was published on August 31, 2020.

Target price is $15.00 Current Price is $7.50 Difference: $7.5
If AVH 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 FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 245.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.06.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 167.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.49.

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

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

The normalised FY20 loss (NPAT) of -US25.5m for Avita Therapeutics was -US$4.1m worse than forecast by Wilsons.

However, the broker detects, from the company’s trading update for sales in July, a clear change in tone regarding the outlook for first quarter growth. This supports the analyst’s revenue forecasts. Also, US RECELL sales tripled to US$13.8m, highlights the analyst.

Sustained growth and clinical catalysts should align market valuations, in the broker’s view.

Wilsons sees the set-up for the company over the next few years as good as any emerging medical device developer under the broker’s coverage.

The rating is upgraded to Overweight from Market Weight and the target price is increased to $8 from $7.58.

This report was published on August 31, 2020.

Target price is $8.00 Current Price is $7.50 Difference: $0.5
If AVH meets the Wilsons target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 141.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.31.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 107.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.00.

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

BGA    BEGA CHEESE LIMITED

Dairy – Overnight Price: $5.31

E.L. & C Baillieu rates ((BGA)) as Hold (3) –

Bega Cheese reported a FY20 underlying profit (NPAT) which was 15.6% ahead of the forecast by Baillieu.

The broker notes the company achieved strong growth in its Australian and international branded businesses. However, this did not offset the impact of reduced margins in the company’s bulk dairy ingredients and nutritionals businesses, explains the analyst.

Stockbroker Baillieu thinks the company looks better placed than in prior years and the company is poised to deliver improved earnings in FY21. This is considered to arise from the completion of its lactoferrin plant at Koroit and cost saving initiatives already underway.

The Hold rating is unchanged and the target price is increased to $5.05 from $4.65.

This report was published on August 31, 2020.

Target price is $5.05 Current Price is $5.31 Difference: minus $0.26 (current price is over target).
If BGA meets the E.L. & C Baillieu target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 12.50 cents and EPS of 20.30 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.16.

Forecast for FY22:

E.L. & C Baillieu forecasts a full year FY22 dividend of 15.00 cents and EPS of 24.40 cents.
At the last closing share price the estimated dividend yield is 2.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.76.

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

CAJ    CAPITOL HEALTH LIMITED

Healthcare services – Overnight Price: $0.26

Wilsons rates ((CAJ)) as Market Weight (3) –

The FY20 earnings (EBITDA) result for Capitol Health beat Wilsons' estimate by 12%. This shows the broker the business has consolidated well under new leadership and a restructured balance sheet.

The earnings beat is reflective of a revenue beat and sharper cost control, with JobKeeper assistance, explains the analyst.

The trading update indicates to the broker a return to quasi-normal growth levels in Tasmania and Western Australia, but Victorian activity is reduced under the second lockdown.

The analyst sees many smaller acquisition targets in the wake of the pandemic which are aligned with the company’s lower cost delivery model in radiology services.

The Market Weight rating is unchanged and the target price is increased to $0.23 from $0.18.

This report was published on August 31, 2020.

Target price is $0.23 Current Price is $0.26 Difference: minus $0.03 (current price is over target).
If CAJ meets the Wilsons 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:

Wilsons forecasts a full year FY21 dividend of 0.50 cents and EPS of 1.10 cents.
At the last closing share price the estimated dividend yield is 1.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.64.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 1.00 cents and EPS of 1.50 cents.
At the last closing share price the estimated dividend yield is 3.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.33.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CGC    COSTA GROUP HOLDINGS LIMITED

Agriculture – Overnight Price: $3.49

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

Costa Group's FY20 profit (NPATS) was -11% below the forecast by Wilsons.

However, the broker believes the trends and general trading conditions are constructive, based on management commentary.

As a result, the analyst makes minimal changes to forecasts and expects further significant earnings improvements in 2021.

Longer-term, Wilsons assumes ongoing growth in the International segment, but modest growth in Produce.

The Overweight rating is unchanged and the target price is increased to $3.67 from $3.35.

This report was published on August 31, 2020.

Target price is $3.67 Current Price is $3.49 Difference: $0.18
If CGC meets the Wilsons target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $3.63, suggesting upside of 6.0%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY20:

Wilsons forecasts a full year FY20 dividend of 9.00 cents and EPS of 12.60 cents.
At the last closing share price the estimated dividend yield is 2.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 11.2, implying annual growth of N/A.
Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 30.5.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 12.00 cents and EPS of 17.90 cents.
At the last closing share price the estimated dividend yield is 3.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.0, implying annual growth of 51.8%.
Current consensus DPS estimate is 9.9, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 20.1.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CUP    COUNTPLUS LIMITED

Commercial Services & Supplies – Overnight Price: $0.98

Wilsons rates ((CUP)) as Market Weight (3) –

Wilsons considers the potential upside for Countplus as a result of IOOF Holdings' ((IFL)) announcement of the acquisition of MLC Wealth.

The broker believes it may be a catalyst for the company to secure advisers from licensees impacted within either organisation.

The analysis by Wilsons assumes if the company were to bring 80 new advisers on board generating $200,000 per adviser in income, the post-tax impact could be a 23.2% uplift to the broker’s FY22 estimated profit (NPAT).

The Market Weight rating and target price of $0.95 are unchanged.

This report was published on September 1, 2020.

Target price is $0.95 Current Price is $0.98 Difference: minus $0.03 (current price is over target).
If CUP meets the Wilsons target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 2.40 cents and EPS of 2.90 cents.
At the last closing share price the estimated dividend yield is 2.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.79.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 2.50 cents and EPS of 2.80 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 35.00.

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

CXL    CALIX LIMITED

Overnight Price: $0.89

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

Calix has released a "strong" FY20 result, with stronger sales revenue and cashflow than Bell Potter’s estimates.

The company is an emerging environmental technology company that is commercialising a range of environmentally friendly solutions for industry. These are derived from its patented minerals processing technology, the Calix Flash Calciner (CFC).

The result included $9.6m in revenue from the IER platform acquisition in the US, notes the broker. Continued plant upgrades by Calix should drive margin expansion, while two new US hydration plants will expand IER’s geographical reach, suggests the analyst.

Bell Potter’s favourable view is supported by growing organic revenue and underpinned by US expansion. In addition, the broker sees potential new licensing agreements in CO2 separation, agriculture and minerals processing.

The Speculative Buy rating is unchanged and the target price is increased to $1.15 from $1.10.

This report was published on August 31, 2020.

Target price is $1.15 Current Price is $0.89 Difference: $0.26
If CXL meets the Bell Potter target it will return approximately 29% (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 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 44.50.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 3.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.72.

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

EVS    ENVIROSUITE LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.20

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

The adjusted FY20 loss (EBITDA) of -$12.1m for Envirosuite was close to in-line with the forecast of Bell Potter. However, revenue was -8% below the broker’s forecast, mostly driven by lower non-recurring revenue (ie hardware), while recurring revenue was close to in-line.

The statutory net loss was higher than the analyst’s forecast, driven by higher one-off items as well as higher depreciation and amortisation charge than expected.

The Buy rating and target price of $0.275 are unchanged.

This report was published on August 31, 2020.

Target price is $0.28 Current Price is $0.20 Difference: $0.075
If EVS meets the Bell Potter target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 22.22.

Forecast for FY22:

Bell Potter forecasts a full year FY22 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 200.00.

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

FWD    FLEETWOOD CORPORATION LIMITED

Infra & Property Developers – Overnight Price: $1.72

Moelis rates ((FWD)) as Hold (3) –

The underlying earnings (EBITDA) for Fleetwood Corp were ahead of consensus, states Moelis. The broker notes the positive surprise of a special dividend of 7cps, which represented a partial return of capital from the sale of the caravan manufacturing division.

The analyst highlights a strong result from accommodation services, but short-term headwinds are expected from new supply coming online in FY21.

Moelis regards a key swing factor for FY21 is the continued improvement in the Building Solutions division.

While there is currently an undemanding valuation, the broker awaits confirmation of an improvement in Building Solutions and/or commencement of new construction project(s) in Karratha.

Moelis reinstates coverage with a Hold rating and a target price of $2.09.

This report was published on August 31, 2020.

Target price is $2.09 Current Price is $1.72 Difference: $0.37
If FWD meets the Moelis target it will return approximately 22% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 4.40 cents and EPS of 14.80 cents.
At the last closing share price the estimated dividend yield is 2.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.62.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 5.30 cents and EPS of 17.60 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.77.

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

GNX    GENEX POWER LIMITED

EV, Solar & Batteries – Overnight Price: $0.21

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

There were no surprises in the FY20 report of Genex Power for Baillieu.

The broker notes significant progress was made during FY20 on the development of Kidston Stage 2-Hydro project (K2H), which is expected to reach financial close shortly. It is considered this will crystallise a large amount of value for shareholders. The analyst points out several key agreements relating to K2H were extended in the June quarter.

Construction has been largely unaffected from covid-19 on the Jemalong project, which the broker assures remains on track to deliver first cashflows in the December quarter.

In the longer term, Baillieu says the company has a full pipeline of solar, wind and battery to deliver future growth.

The Buy rating is unchanged and the target price is $0.33.

This report was published on August 28, 2020.

Target price is $0.33 Current Price is $0.21 Difference: $0.12
If GNX meets the E.L. & C Baillieu target it will return approximately 57% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

E.L. & C Baillieu 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 26.25.

Forecast for FY22:

E.L. & C Baillieu forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.00.

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

GTN    GTN LIMITED

Print, Radio & TV – Overnight Price: $0.36

Canaccord Genuity rates ((GTN)) as Upgrade to Buy from Hold (1) –

Canaccord Genuity believes GTN is one of the cheapest stocks on FY22 estimates, with significant leverage to a recovery in revenues.

The business was showing signs of distinct improvement in the second and third quarters of FY20, before the steep pandemic-induced declines of the fourth quarter, explains the broker.

The analyst highlights trading looks to be improving in July and August after a rollercoaster FY20.

The rating is upgraded to Speculative Buy from Hold and the target price is unchanged at $0.58.

This report was published on August 31, 2020.

Target price is $0.58 Current Price is $0.36 Difference: $0.22
If GTN meets the Canaccord Genuity target it will return approximately 61% (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 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 1.70 cents and EPS of 6.10 cents.
At the last closing share price the estimated dividend yield is 4.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.90.

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

HSN    HANSEN TECHNOLOGIES LIMITED

IT & Support – Overnight Price: $3.95

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

Hansen Technologies delivered a "strong" FY20 result with earnings (EBITDA), cashflow, profit and dividend all ahead of Baillieu’s forecasts. The reported profit (NPAT) was significantly higher than the broker’s forecast due to higher operating earnings as well as a lower tax rate.

The analyst sees the result as the product of hard work to reinvigorate top line growth, to integrate the Sigma acquisition and to drive efficiency through the remainder of the business.

Baillieu increases EPS estimates by between 21%-22% over the forecast period. The Buy rating is unchanged and the target price is increased to $5.20 from $4.20.

This report was published on August 30, 2020.

Target price is $5.20 Current Price is $3.95 Difference: $1.25
If HSN meets the E.L. & C Baillieu target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 10.00 cents and EPS of 17.10 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.10.

Forecast for FY22:

E.L. & C Baillieu forecasts a full year FY22 dividend of 10.00 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.57.

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

HUO    HUON AQUACULTURE GROUP LIMITED

Aquaculture – Overnight Price: $2.90

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

Huon Aquaculture reported operating profit (NPAT) stronger than Bell Potter’s expectations.

A rise in revenue reflected a 36% year-on-year (YOY) uplift in volumes and a -11% YOY movement in prices, explains the broker.

The analyst raises volume assumptions, downgrades pricing expectations and dilutes for new equity.

Bell Potter summarises the challenge for the company in FY21 is placing an additional 11,000kt of salmon in what looks like an ex-growth domestic market at a time of heightened competition.

The Hold rating and target price of $3.45 are unchanged.

This report was published on August 31, 2020.

Target price is $3.45 Current Price is $2.90 Difference: $0.55
If HUO meets the Bell Potter target it will return approximately 19% (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 1.00 cents and EPS of 3.50 cents.
At the last closing share price the estimated dividend yield is 0.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 82.86.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 7.00 cents and EPS of 25.80 cents.
At the last closing share price the estimated dividend yield is 2.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.24.

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

LLC    LENDLEASE GROUP

Infra & Property Developers – Overnight Price: $12.00

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

Lendlease is targeting an 80%-plus lift in its annual rate of development production.

Goldman Sachs predicts the earnings benefit of this higher rate of throughput will be delivered primarily via the company’s Investments business rather than stronger Development segments profits.

It’s considered this will be in the form of faster funds under management (FUM) formation and greater cornerstone investments.

The company also flagged the formation of additional core-plus and value-add funds.

The broker believes the incremental shift toward the Investment segment and away from Development should lead to a higher quality and more predictable earnings mix. 

Goldman Sachs expects the result will be a narrowing of the material gap between the share price and the broker’s assessment of fair value for the company.

Goldman Sachs adjusts EPS estimates for FY21, FY22 and FY23 by 0.3%, -7.2% and -8.1%, respectively.

The Buy rating is unchanged and the target price is increased to $16.37 from $16.32.

This report was published on September 1, 2020.

Target price is $16.37 Current Price is $12.00 Difference: $4.37
If LLC meets the Goldman Sachs target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $13.89, suggesting upside of 18.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 50.00 cents and EPS of 112.00 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 10.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.3, implying annual growth of N/A.
Current consensus DPS estimate is 34.1, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 16.5.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 79.00 cents and EPS of 159.00 cents.
At the last closing share price the estimated dividend yield is 6.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 95.6, implying annual growth of 34.1%.
Current consensus DPS estimate is 46.4, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 12.3.

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

MTO    MOTORCYCLE HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $1.85

Moelis rates ((MTO)) as Buy (1) –

Motorcycle Holdings delivered underlining earnings (EBITDA) which were above the top end of guidance, comments Moelis.

The broker views it as a very strong result with revenue up 10.2%, earnings up 53.3% and underlying profit (NPAT) up 93.7%.

A special dividend of 5cps was declared.

The company notes that "interest in motorcycles has ramped up since covid-19 and continues to be strong".

The broker expects the strong balance sheet to protect against future downturns, and cost-outs and stock shortages to drive margin expansion.

Even assuming a weaker trading environment, Moelis considers a 10x FY22 price earnings, remains too cheap.

Moelis reinstates coverage with a Buy rating and target price of $2.56.

This report was published on August 31, 2020.

Target price is $2.56 Current Price is $1.85 Difference: $0.71
If MTO meets the Moelis target it will return approximately 38% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 7.40 cents and EPS of 24.70 cents.
At the last closing share price the estimated dividend yield is 4.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.49.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 11.20 cents and EPS of 18.70 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 9.89.

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

NSR    NATIONAL STORAGE REIT

REITs – Overnight Price: $1.87

Moelis rates ((NSR)) as Hold (3) –

The underlying earnings (EPS) FY20 result for National Storage REIT was described as relatively soft by Moelis, with revenue per available metre (RevPAM) down -4%. This compares to peer Storage King with flat RevPAM.

However, anecdotally occupancy, which fell -3.4%, has bounced back in July and August, reassures the broker.

The REIT has guided to EPS of 7.7-8.3cps for FY21, which assumes around 3-5% of RevPAM growth and $200-$300m of acquisitions,  calculates the analyst.

The broker believes investors will continue to look past the operating result, and notes the REIT is the subject of ongoing speculation around mergers and acquisitions.

Moelis reinstates coverage with a Hold rating and a target price of $1.80.

This report was published on August 31, 2020.

Target price is $1.80 Current Price is $1.87 Difference: minus $0.07 (current price is over target).
If NSR meets the Moelis target it will return approximately minus 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $1.79, suggesting downside of -4.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 7.50 cents and EPS of 8.10 cents.
At the last closing share price the estimated dividend yield is 4.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.2, implying annual growth of -44.1%.
Current consensus DPS estimate is 7.9, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 22.8.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 8.20 cents and EPS of 8.70 cents.
At the last closing share price the estimated dividend yield is 4.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.5, implying annual growth of 3.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 22.0.

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

NXT    NEXTDC LIMITED

Cloud services – Overnight Price: $12.47

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

NextDC had a predictable financial result, which is considered a virtue by Canaccord Genuity. The stock tends to move on other things like contract wins or securing new sites, explains the broker.

Company guidance was in-line with the analyst’s expectations. Canaccord Genuity assesses the next main event may be the refinancing of $300m of unsecured notes.

The Buy rating is unchanged and the target price is increased to $13 from $12.50.

This report was published on August 31, 2020.

Target price is $13.00 Current Price is $12.47 Difference: $0.53
If NXT meets the Canaccord Genuity target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $12.67, suggesting upside of 2.2%(ex-dividends)
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 minus 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 402.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 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 2078.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.3, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 375.8.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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

NextDC reported underlying FY20 sales and earnings (EBITDA) at the top end of its guidance range, reports Goldman Sachs.

The broker points out headline revenue trends remain constructive, when taking into account FY21 company guidance.

The company noted that it is likely to soon announce a material debt-refinancing, to help fund its material capital program, which the broker estimates is likely to accelerate now the M3 land has been acquired.

Goldman Sachs makes only minor adjustments to forecast revenues out to FY23. The Buy rating is unchanged and the target price is increased to $13.20 from $12.10.

This report was published on August 31, 2020.

Target price is $13.20 Current Price is $12.47 Difference: $0.73
If NXT meets the Goldman Sachs target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $12.67, suggesting upside of 2.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1247.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 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 623.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.3, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 375.8.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OBL    OMNI BRIDGEWAY LIMITED

Diversified Financials – Overnight Price: $3.86

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

Goldman Sachs calculates a minimal cash impact on Omni Bridgeway for the loss in the Westgem litigation. However, with the company still evaluating the outcome, the broker awaits further information before reviewing forecasts.

More importantly for the analyst, this brings us closer to the company’s Fund model, becoming the overarching driver of earnings.
Goldman Sachs sees that $100m per year of profit (NPAT) is achievable from the fund model, with upside as funds under management grow. Additionally, this earnings stream is considered lower risk for shareholders.

The broker believes the loss of Westgem has no impact on the company’s ability to fund future growth opportunities and the new funds model should deliver a higher return on capital.

The Buy rating and target price of $5.80 are unchanged.

This report was published on August 28, 2020

Target price is $5.80 Current Price is $3.86 Difference: $1.94
If OBL meets the Goldman Sachs target it will return approximately 50% (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 7.00 cents and EPS of 95.00 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.06.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 7.00 cents and EPS of 54.00 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.15.

Market Sentiment: 1.0
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: $2.91

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

Opthea’s FY20 net loss of -$16.5m was better than the Bell Potter forecast loss of -$40.1m. Research and development costs were significantly lower than the broker's estimates due to timing issues. 

The analyst expects the company to raise a minimum of US$100m from its planned US IPO and further expects another cash injection will be required in FY22 to fully fund its Phase 3 program. The company has recently reached agreement with the FDA and EMA on its Phase 3 wet AMD trial design for OPT-302.

The Buy rating is unchanged and the target price is decreased to $4.90 from $5.05.

This report was published on August 31, 2020.

Target price is $4.90 Current Price is $2.91 Difference: $1.99
If OPT 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 minus 26.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.19.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 11.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.09.

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

PKS    PKS HOLDINGS LIMITED

Healthcare services – Overnight Price: $0.30

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

In the first full listed year for PKS Holdings operating margins continued to remain strong, observes Shaw and Partners.

When taking into account the Pavilion acquisition, the combined entity generated $7.5m of operating revenue with operating earnings (EBITDA) margins of 40% at a pro-forma level, calculates the broker.

The company provided preliminary guidance for FY21 that aligns with the analyst’s estimates.

Shaw and Partners likes the high level of recurring income, high profitability, global applicability and potential for structural tailwinds across FY21.

The Buy rating is unchanged and the target price is increased to $0.35 from $0.34.

This report was published on August 31, 2020.

Target price is $0.35 Current Price is $0.30 Difference: $0.05
If PKS meets the Shaw and Partners target it will return approximately 17% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.67.

Forecast for FY22:

Shaw and Partners 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 10.00.

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

QHL    QUICKSTEP HOLDINGS LIMITED

Commercial Services & Supplies – Overnight Price: $0.08

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

Quickstep Holdings reported a solid FY20 result, given the significant supply-chain disruption relating to covid-19, according to Canaccord Genuity.

The broker highlights the announcement of a new collaborative project with Spirit AeroSystems to develop the company’s AeroQure manufacturing process technology in commercial aerospace.

Quickstep has also announced a second development program with an undisclosed OEM. While potential revenue contribution is around 24 months away, the analyst believes it is a step toward creating a diversified defense/commercial aerospace business.

The company has guided to a 5-10% revenue lift for FY21.

Canaccord Genuity calculates existing contracts are trading at an around -40% discount to their value, but believes the market will be looking for execution on the pipeline for a re-rating to occur.

The Buy rating and target price of $0.14 are unchanged.

This report was published on August 31, 2020.

Target price is $0.14 Current Price is $0.08 Difference: $0.06
If QHL meets the Canaccord Genuity target it will return approximately 75% (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 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 80.00.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 80.00.

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

QIP    QANTM INTELLECTUAL PROPERTY LIMITED

Legal – Overnight Price: $1.00

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

The underlying FY20 earnings (EBITDA) – post-AASB16- for QANTM Intellectual Property were in-line with the estimate of Bell Potter.

The patents business increased revenue by 5.8% versus the previous corresponding period. The growth was underpinned by a buoyant level of examination/strategic work, notes the broker. Asia remains solid, accounting for around 7% of overall revenue, and another acquisition would add scale and enable growth to accelerate, assesses the analyst.

Bell Potter reduces EPS estimates for FY21, FY22 and FY23 by -11%, -11% and -8%, respectively, to account for the market induced slowing in filings.

The Buy rating is unchanged and the target price is decreased to $1.60 from $1.70.

This report was published on August 31, 2020.

Target price is $1.60 Current Price is $1.00 Difference: $0.6
If QIP 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 FY21:

Bell Potter forecasts a full year FY21 dividend of 7.10 cents and EPS of 10.20 cents.
At the last closing share price the estimated dividend yield is 7.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.80.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 7.60 cents and EPS of 10.60 cents.
At the last closing share price the estimated dividend yield is 7.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.43.

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

VRL    VILLAGE ROADSHOW LIMITED

Travel, Leisure & Tourism – Overnight Price: $2.09

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

Village Roadshow reported a normalised net loss after tax (NLAT) of -$43m. Group revenue and earnings (EBITDA) – pre-AASB-16 – were below the forecasts of Baillieu.

The miss to forecasts was the result of the broker miscalculating the third versus fourth quarter revenue mix and underestimating the fixed cost base of closed businesses. However, the analyst prefers to focus on the future, with businesses now either reopened or reopening.

All theme parks and cinemas (excluding Victoria) reopened across June and July.

Many potential risks remain, warns the analyst, the biggest being if the BGH proposal does not proceed. Baillieu would not argue with any investor seeking to de-risk the situation by selling on-market on any share price strength.

The Buy rating is unchanged and the target price is decreased to $0.70 from $0.75.

This report was published on August 28, 2020.

Target price is $0.70 Current Price is $2.09 Difference: minus $1.39 (current price is over target).
If VRL meets the E.L. & C Baillieu target it will return approximately minus 67% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY21:

E.L. & C Baillieu forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 13.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.95.

Forecast for FY22:

E.L. & C Baillieu forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 10.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.49.

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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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.

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