Australian Broker Call *Extra* Edition – Jun 16, 2021

This story features AROA BIOSURGERY LIMITED, and other companies. For more info SHARE ANALYSIS: ARX

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   ARX (2)   AVH (2)   BCB   BRI   BWX (3)   BXB   CGF   ELD (2)   GGG   GNG   IPL   LEG   PLS   PRN   RFG   S32   SSM   SUN  

ALG    ARDENT LEISURE GROUP

Travel, Leisure & Tourism – Overnight Price: $1.00

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

Ardent Leisure Group's Main Event segment has continued strong trading performance into May, with underlying earnings for the first four months of 2021 tracking 12% ahead of the same period in 2019. 

Canaccord Genuity notes these results bode well for valuation ahead of RedBird Capital Partner's option over an additional 26.8% of Main Event equity. The broker considers RedBird's acquisition of a 51% stake increasing unlikely.

Near-term forecasts are materially lifted, and Canaccord now expects full revenue recovery to occur during FY22 rather than FY23. 

The Buy rating is retained and the target price increases to $1.30 from $1.22. 

This report was published on May 18, 2021.

Target price is $1.30 Current Price is $1.00 Difference: $0.3
If ALG meets the Canaccord Genuity target it will return approximately 30% (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 minus 21.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.76.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 10.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.00.

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

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $1.08

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

Tela Bio, Aroa Biosurgery's distribution partner, has reported first quarter results in line with expectations. Revenue of $5.9m equated to a 58% increase on the previous corresponding period and 3.7% on the prior quarter. 

The company noted strengthened operations from March, following some covid impacts in January. 

Aroa Biosurgery's OviTex product is implied to be gaining market share with a shift towards minimally invasive laparoscopic and robotic procedures, opening the product to the whole hernia market. Bell Potter considers a revenue beat to be a possibility from market share gains. 

The Speculative Buy rating are target price of $2.00 are retained. 

This report was published on May 18, 2021.

Target price is $2.00 Current Price is $1.08 Difference: $0.92
If ARX meets the Bell Potter target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 46.96.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 67.50.

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

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

Aroa Biosurgery’s US partner Tela Bio reported recent quarterly net sales of US$5.9m, up 58% versus the previous period and 7% ahead of Wilsons forecast (US$5.5m).

There was no change to FY21 revenue guidance which remains at US$27-30m.

But management commentary revealed that elective procedural volumes have returned from their covid slump, while hospital access/surgical volumes are within 90% of where they were pre-covid, the broker points out.

Overweight and $2 price target retained.

This report was published on May 14, 2021.

Target price is $2.00 Current Price is $1.08 Difference: $0.92
If ARX meets the Wilsons target it will return approximately 85% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY21:

Wilsons forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 5.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 21.18.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 63.53.

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: $5.01

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

Avita Medical recorded a new record for quarterly sales of $8.8m inclusive of $4.6m in commercial sales and $4.2m for BARDA sales.

Reflecting improving market conditions in the US, revenue guidance for fourth quarter FY21 is in the range of $8.2-$8.6m consisting of revenues from commercial sales in the range of $5.0-$5.3m, plus BARDA revenues of $3.2-$3.3m.

In the March quarter there were significant fluctuations in volumes across the highest volume burn centres, which Bell Potter attributes to reduced volumes of burns – due to covid-related activity levels – and surgeon absence.

Buy rating is maintained, and the target is lowered to $10.50 from $12.40 to reflect the broker's estimate of the change in market sentiment towards speculative, higher risk stocks.

This report was published on May 17, 2021.

Target price is $10.50 Current Price is $5.01 Difference: $5.49
If AVH meets the Bell Potter target it will return approximately 110% (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 122.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.08.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 119.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.20.

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

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

Based on the disparity between RECELL’s impressive burns market penetration and low sales intensity, Wilsons has downgrade Avita Medical to Marketweight from Overweight and cut the price target by more than -20% to $5.75.

Burns and trauma underpin Wilsons valuation assessment because the broker is indifferent towards RECELL as a candidate for vitiligo treatment.

The broker has cut FY22-23 RECELL sales forecasts by -15-20%. Cuts to sales reflect slower aggregate account penetration, a procedural mix shift to smaller burns and the deferral of incremental volume from other indications (paediatrics, trauma) and settings.

Wilsons notes, while earnings revisions push profitability out into FY26, a US$115m cash position provides adequate funding.

Overweight rating with a target price of $7.80.

This report was published on May 17, 2021.

Target price is $7.80 Current Price is $5.01 Difference: $2.79
If AVH meets the Wilsons target it will return approximately 56% (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 123.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.06.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 152.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.29.

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

BCB    BOWEN COKING COAL LTD

Coal – Overnight Price: $0.07

Euroz Hartleys rates ((BCB)) as Buy (2) –

As per Euroz Hartleys comments, Broadmeadow East has been catapulted to the most commercially advanced of Bowen Coking Coal's four coking coal assets driven by commercialisation via third party infrastructure agreements.

Euroz Hartleys notes increasing market awareness should see the company trade towards its target price. 

The broker highlights little value has been attributed to the low capex, early production option at Isaac River to date, or the large 177m tonne resource at Cooroorah. 

The Speculative Buy rating and target price of $0.15 are retained. 

This report was published on April 23, 2021.

Target price is $0.15 Current Price is $0.07 Difference: $0.08
If BCB meets the Euroz Hartleys target it will return approximately 114% (excluding dividends, fees and charges).

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

BRI    BIG RIVER INDUSTRIES LIMITED

Building Products & Services – Overnight Price: $2.15

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

Moelis initiates coverage on Australian and New Zealand trade-focused timber and building product distributor, Big River Industries. The company manufactures and distributes specialty products including engineered timber flooring, customised plywood and architectural panels. 

The broker notes the current Australian construction cycle should drive multi-year growth for the company which attributed more than 50% of expected FY21 revenue to residential builds. Strong demand for detached housing is expected to drive growth, with approvals for these structures up 35% on 2020. 

Big River has 3 manufacturing facilities and 18 distribution sites in Australia and New Zealand, offering scale and diversification benefits. Further, Moelis expects operating leverage and recent acquisitions to drive strong earnings growth, estimating a compound annual growth rate on earnings of 22% from FY20-22. 

Moelis initiates coverage with a Buy rating and target price of $2.24.

This report was published on May 17, 2021. 

Target price is $2.24 Current Price is $2.15 Difference: $0.09
If BRI meets the Moelis target it will return approximately 4% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 5.20 cents and EPS of 9.70 cents.
At the last closing share price the estimated dividend yield is 2.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.16.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 5.60 cents and EPS of 11.30 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.03.

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

BWX    BWX LTD

Household & Personal Products – Overnight Price: $5.22

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

BWX has announced the acquisition of online retailer Flora and Fauna for a debt-funded cash consideration of $27.9-30.8m. Management is expecting the acquisition to be earnings per share accretive in FY22 and strongly accretive by F24. 

Alongside Nourished Life, Flora and Fauna will form the basis of a direct-to-consumer unit which Bell Potter expects to benefit from operating efficiencies, promotional activities and cross sell opportunities, with only 13% customer crossover.

Flora and Fauna is expected to report FY21 revenue of $16.4-17.1m with an underlying profit margin greater than 4%. The broker upgrades underlying earnings forecasts for FY22 and FY23 by 2.9% and 5.0% respectively based on the acquisition. 

The Buy rating is retained and the target price increased to $5.70 from $5.40. 

This report was published on May 18, 2021.

Target price is $5.70 Current Price is $5.22 Difference: $0.48
If BWX meets the Bell Potter target it will return approximately 9% (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 4.20 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 0.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.44.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 6.30 cents and EPS of 17.80 cents.
At the last closing share price the estimated dividend yield is 1.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.33.

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

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

BWX has announced the expansion of its direct-to-consumer channel through the acquisition of online retail platform Flora & Fauna, expecting to pay $27.9-30.8m. The debt-funded transaction is expected to settle in early July. 

Flora and Fauna reported revenue of $10m in FY19 and $12m in FY20, with a revenue forecast of $16.4-17.1m for the current financial year. The broker points out the acquisition represents limited overlap with BWX's existing brands, accounting for around 13% customer overlap with the Nourished Life brand. 

Management has guided towards the acquisition being earnings accretive in FY22 and strongly accretive in FY24. Canaccord Genuity has incorporated an additional earnings increase of 2% in FY22, 4% in FY23 and 6% in FY24. 

The Buy rating is retained and the target price increases to $5.15 rom $4.95. 

This report was published on May 18, 2020.

Target price is $5.15 Current Price is $5.22 Difference: minus $0.07 (current price is over target).
If BWX meets the Canaccord Genuity target it will return approximately minus 1% (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 4.70 cents and EPS of 13.00 cents.
At the last closing share price the estimated dividend yield is 0.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.15.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 5.40 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 1.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.63.

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

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Moelis rates ((BWX)) as Buy (1) –

BWX has acquired Flora and Fauna, an online retailer of vegan, ethical and sustainable products, for $27.9-30.8m. Flora and Fauna is expected to deliver revenue of $16.4-17.1m for FY21.

Moelis notes this acquisition could be combined with the under-performing Nourished Life platform to offer strategic value from a cost and revenue perspective. The broker expects substantial cost savings from warehouse consolidation, marketing efficiencies and procurement benefits that will be earnings accretive.

Further, Flora and Fauna offers BMX access to a younger, more eco-conscious consumer at a time of rising demand for ethical, sustainable and vegan products that is becoming a structural trend.

Moelis also looks ahead to BMX resuming expansion into the US market. The Buy rating is retained and the target price increases to $5.61 from $5.44.

This report was published on May 17, 2021.

Target price is $5.61 Current Price is $5.22 Difference: $0.39
If BWX meets the Moelis target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Moelis forecasts a full year FY21 dividend of 3.80 cents and EPS of 12.20 cents.
At the last closing share price the estimated dividend yield is 0.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.79.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 4.50 cents and EPS of 17.80 cents.
At the last closing share price the estimated dividend yield is 0.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.33.

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

BXB    BRAMBLES LIMITED

Transportation & Logistics – Overnight Price: $11.28

Jarden rates ((BXB)) as Buy (2) –

Jarden expects persistent signs of inflation within lumber, a key input for Brambles' US Pallets business to be offset by better contract structures and surcharges, boosted by rational competition and tight supply of alternatives, due to lumber market tightness.

The broker forecasts CHEP Americas underlying earnings (EBIT) margin to expand 130bps in second half FY21.

Key risks to Jarden's positive investment view include irrational competition for market share in US Pallets market, ineffective inflationary hedges in the Americas and EMEA, and pressure on free cashflow from higher capex.

The broker is forecasting US Pallets revenue growth of 6.1% in second half FY21, with price contributing 3.0% and volume 3.1%.

Overweight rating and target price of $11.85 both remain unchanged.

This report was published on May 17, 2021.

Target price is $11.85 Current Price is $11.28 Difference: $0.57
If BXB meets the Jarden target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $12.04, suggesting upside of 6.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 31.57 cents and EPS of 49.98 cents.
At the last closing share price the estimated dividend yield is 2.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.1, implying annual growth of N/A.
Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 22.1.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 33.59 cents and EPS of 53.34 cents.
At the last closing share price the estimated dividend yield is 2.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.2, implying annual growth of 10.0%.
Current consensus DPS estimate is 32.3, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 20.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CGF    CHALLENGER LIMITED

Wealth Management & Investments – Overnight Price: $5.56

Jarden rates ((CGF)) as Initiation of coverage with Overweight (2) –

Despite Challenger being on track to post its third consecutive year of double-digit earnings per share (EPS) decline in FY21, Jarden initiates coverage with an Overweight rating, and target price of $5.90.

Jarden's analysis suggests the tide should turn in FY22 with forecast EPS growth of 11.5% followed by 8% 3-year compound annual growth rate.

Underscoring Jarden's outlook is spread margin stability, enabling Life profits to track 5% asset growth, plus 12% funds management profit growth, underpinned by above-peer flows and performance.

The broker also expects the company's strategic expansion into term deposits through its pending Bank acquisition to add 1.5% pa to group profit before tax post FY22.

Challenger is currently trading at a -20%-plus discount to Jarden's adjusted net tangible asset valuation.

This report was initially released on May 17, 2021.

Target price is $5.90 Current Price is $5.56 Difference: $0.34
If CGF meets the Jarden target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $6.17, suggesting upside of 11.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 18.80 cents and EPS of 35.30 cents.
At the last closing share price the estimated dividend yield is 3.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.8, implying annual growth of N/A.
Current consensus DPS estimate is 20.4, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 14.3.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 11.40 cents and EPS of 39.30 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.5, implying annual growth of 9.5%.
Current consensus DPS estimate is 23.5, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 13.1.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $11.62

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

Revenue of $1,100m during the first half for Elders was a 19% year-on-year increase, while underlying earnings were up 40% year-on-year to $73.8m. Results were stronger than expected driven by strong annual internal rate of return.

The company pointed to strong demand in retail, but Bell Potter noted cattle prices are expected to weaken and ovine markets to remain largely static. 

During the half $21.4m was invested in acquisitions, and the broker considers continued acquisitions to be key to earnings growth projections. 

The Buy rating is retained and the target price increases to $13.75 from $13.60.

This report was published on March 18, 2021.

Target price is $13.75 Current Price is $11.62 Difference: $2.13
If ELD meets the Bell Potter target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $13.15, suggesting upside of 13.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Bell Potter forecasts a full year FY21 dividend of 40.00 cents and EPS of 87.40 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 13.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.6, implying annual growth of 8.5%.
Current consensus DPS estimate is 40.9, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 13.4.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 40.00 cents and EPS of 69.20 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 16.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 91.3, implying annual growth of 5.4%.
Current consensus DPS estimate is 44.6, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 12.7.

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

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

Elders continues to demonstrate strong record, good industry structure, potential for positive earnings surprise and an attractive valuation following the release of first half results, according to Goldman Sachs. 

The company is seen as well-positioned for continued expansion in the rural products and agency networks. Elders made six acquisitions in the first half, expecting underlying earnings increase of $2.5-3.5m, with another 17 potential targets identified for inorganic growth. 

As per the broker's comments, execution of the backward integration strategy is expected to deliver up to $37.5m in underlying earnings, and drove a strong result in the first half. 

Buy rating is maintained with the target increasing to $15.35 from $15.00. 

This report was published on May 18, 2021.

Target price is $15.35 Current Price is $11.62 Difference: $3.73
If ELD meets the Goldman Sachs target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $13.15, suggesting upside of 13.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 38.00 cents and EPS of 85.00 cents.
At the last closing share price the estimated dividend yield is 3.27%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.6, implying annual growth of 8.5%.
Current consensus DPS estimate is 40.9, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 13.4.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 40.00 cents and EPS of 69.00 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 16.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 91.3, implying annual growth of 5.4%.
Current consensus DPS estimate is 44.6, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 12.7.

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

GGG    GREENLAND MINERALS LIMITED

Rare Earth Minerals – Overnight Price: $0.11

Euroz Hartleys rates ((GGG)) as Cessation of coverage (-1) –

Euroz Hartleys has ceased coverage on Greenlands Minerals with progression of the Kvanefjeld Project halted for the foreseeable future. 

With the formation of a coalition opposed to uranium mining, the broker notes the only catalyst for the stock is a change in government and notes this acts as a reminder of the jurisdiction risk associated with uranium resources. 

This report was published on April 21, 2021. 

Current Price is $0.11. Target price not assessed.

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

GNG    GR ENGINEERING SERVICES LIMITED

Mining Sector Contracting – Overnight Price: $1.53

Euroz Hartleys rates ((GNG)) as Buy (1) –

GR Engineering Services has announced the acquisition of Mipac for $21.4m. The agreement outlines $14.5m to be paid upfront with the remaining balance to be paid over 18 months based on underlying earnings targets. 

With the acquisition expected to be margin accretive by Euroz Hartleys, the broker increases revenue forecast to $372m from previous guidance of $340-360m. 

An imminent resources boom in construction points to a strong medium-term outlook for the company, with the broker noting while revenue forecast for FY22 is around $25m there is potential for capability shortage and high production urgency that could lead to strong revenue growth and margins.

The Buy rating is retained and the target price increases to $1.77 from $1.75. 

This report was published on April 27, 2021.

Target price is $1.77 Current Price is $1.53 Difference: $0.24
If GNG meets the Euroz Hartleys target it will return approximately 16% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY21:

Euroz Hartleys forecasts a full year FY21 dividend of 10.00 cents and EPS of 9.80 cents.
At the last closing share price the estimated dividend yield is 6.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.61.

Forecast for FY22:

Euroz Hartleys forecasts a full year FY22 dividend of 10.50 cents and EPS of 15.10 cents.
At the last closing share price the estimated dividend yield is 6.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.13.

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

IPL    INCITEC PIVOT LIMITED

Agriculture – Overnight Price: $2.40

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

Due primarily to Fertilisers and Dyno Americas, Incitec Pivot reported 1H21 underlying earnings (EBIT) of $110m, -36% below Goldman Sachs' estimate and -30% below market consensus.

Management did not provide explicit FY21 earnings guidance but noted expectations for a stronger than typical second half earnings and cash flow skew.

The company expects to benefit from unsold ammonium phosphate on hand ($25m), a lighter turnaround schedule ($44m), plant reliability improvements, and year-on-year fertiliser price gains.

Incitec Pivot also reiterated targets for Waggaman to exit FY21 at nameplate production. Goldman Sachs' Neutral rating and price target of $2.93 are both retained.

This report was published on May 17, 2021.

Target price is $2.93 Current Price is $2.40 Difference: $0.53
If IPL meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $2.90, suggesting upside of 21.0%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 7.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.5, implying annual growth of 89.6%.
Current consensus DPS estimate is 6.5, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 17.8.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 9.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.9, implying annual growth of 32.6%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 13.4.

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

LEG    LEGEND MINING LIMITED

Nickel – Overnight Price: $0.12

Euroz Hartleys rates ((LEG)) as Buy (2) –

Drilling tests at Mawson have delivered semi-massive and massive sulphide mineralisation 1.2km northeast and 400m east southeast of the project's main discovery area. These results highlight the potential scale of the project, comments Euroz Hartleys.

Euroz Hartleys notes the results indicate both aerial scale and width, with evidence of potential material that has been otherwise obscured to date. A down-hole transient electro-magnetic will now be conducted.

The Speculative Buy rating and $0.30 target are retained.

This report was published on April 28, 2021.

Target price is $0.30 Current Price is $0.12 Difference: $0.18
If LEG meets the Euroz Hartleys target it will return approximately 150% (excluding dividends, fees and charges).

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

PLS    PILBARA MINERALS LIMITED

New Battery Elements – Overnight Price: $1.38

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

After attending a recent Pilbara Minerals investor day and site visit, Cannacord Genuity has upgraded the company to Buy from Hold and increased the target price to $1.45 from $1.15.

A key takeaway noted by Cannacord includes the Ngungaju plant (ex-Altura) which should be commissioned in second half 2020 and ramp up to full production from 2022. Given strong demand, the broker thinks this may result in further price pressure, as converters who are short feedstock bid prices up.

Pilbara Minerals is also investigating a move down the value chain by producing a midstream lithium sulphate product, which Cannacord suspects may deliver greater margins and reduce the overall hard rock supply chain carbon footprint.

Cannacord has updated its model for the “Step 1” expansion in March quarter 2024 and “Step 2” in December quarter 2026 at the Pilgan plant.

The broker is now forecasting Pilbara Minerals producing 1Mtpa SC6 from Dec quarter 2026, and has moved back the Ngungaju ramp-up profile leading to a fall in FY22 and FY23 earnings.

Cannacord has reduced its expansion and optionality value after recent updates, but has maintained $100m on account of the midstream potential.

This report was issued May 17, 2021.

Target price is $1.45 Current Price is $1.38 Difference: $0.07
If PLS meets the Canaccord Genuity target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $1.20, suggesting downside of -13.0%(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 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 138.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.4, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 34.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 3.2, implying annual growth of N/A.
Current consensus DPS estimate is 0.2, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 43.1.

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

PRN    PERENTI GLOBAL LIMITED

Mining Sector Contracting – Overnight Price: $0.68

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

After a disappointing trading update which saw Perenti Global's share price fall by around -30%, Cannacord Genuity has lowered the target price to $0.87 from $1.54.

The broker estimates the vast majority of the downgrade is directly linked to a delayed ramp up at Zone 5 due to covid, and wage inflation in Western Australia.

However, having concluded that the market outlook over the longer term is strengthening, the broker retains a Buy rating on the company.

Cannacord notes there are no clear near-term catalysts that will shift sentiment on the company.

However, the broker remains positive on Perenti given the company is trading on an FY22 PE of 5.8x, EV/EBITDA of 2.5x, a dividend yield of 10%, and trading -18% below net tangible assets (NTA).

This report was published on May 13, 2021. 

Target price is $0.87 Current Price is $0.68 Difference: $0.19
If PRN meets the Canaccord Genuity target it will return approximately 28% (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 7.00 cents and EPS of 11.50 cents.
At the last closing share price the estimated dividend yield is 10.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.91.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 7.00 cents and EPS of 11.90 cents.
At the last closing share price the estimated dividend yield is 10.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.71.

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

RFG    RETAIL FOOD GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $0.07

Shaw and Partners rates ((RFG)) as Initiation of coverage with Buy (1) –

Based on the new management team's ability to fundamentally overhaul Retail Food Group, clean up the balance sheet, reorganise the business, and entrench a franchisee-first strategy, Shaw and Partners initiates coverage with a Buy rating and a target price of $0.14.

While Shaw believes Retail Food Group remains a high-risk investment, the broker sees enormous upside in the event outstanding historical regulatory matters can be resolved.

Shaw forecasts a return to earnings (EBITDA) growth in FY22 (+14% to $30.1m), continued debt reduction, and a resumption of dividends in second half FY22.

The broker sees Retail Food Group's -45% discount to peers as highly attractive, notwithstanding a multi-year investigation by the ACCC into historical matters, which recently escalated to legal action.

This report was issued May 17, 2021.

Target price is $0.14 Current Price is $0.07 Difference: $0.07
If RFG meets the Shaw and Partners target it will return approximately 100% (excluding dividends, fees and charges).

Forecast for FY21:

Shaw and Partners forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.00.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.30 cents and EPS of 1.00 cents.
At the last closing share price the estimated dividend yield is 4.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.00.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $2.92

Goldman Sachs rates ((S32)) as Buy (1) –

South32 has announced the South Africa Energy Coal divestment to Seriti is now unconditional and expected to complete on June 1. Goldman Sachs views the divestment as transformational for South32. 

The broker expects South32's thermal coal revenue will reduce to less than 1%, from 12% of group revenue, making the stock more attractive from an ESG view. Goldman Sachs also forecasts a net present value increase of US$660m, allowing an increase in capital returns from the transaction up to US$1bn. 

South32 will pay ten annual installments for rehabilitation activity, amounting to -US$27.5m per year for four years and then -US$15m per year for the remaining years. 

Buy rating and target price of $3.40 remain unchanged.

This report was issued May 17, 2021.

Target price is $3.40 Current Price is $2.92 Difference: $0.48
If S32 meets the Goldman Sachs target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $3.30, suggesting upside of 13.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Goldman Sachs forecasts a full year FY21 dividend of 10.21 cents and EPS of 15.72 cents.
At the last closing share price the estimated dividend yield is 3.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.1, implying annual growth of N/A.
Current consensus DPS estimate is 6.2, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 19.3.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 25.80 cents and EPS of 36.81 cents.
At the last closing share price the estimated dividend yield is 8.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.1, implying annual growth of 59.6%.
Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 12.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SSM    SERVICE STREAM LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.91

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

An update on timing for NBN Co's $3.5bn network upgrade program roll out has caused Service Stream's expected revenue benefit to be pushed back. Canaccord Genuity has decreased expected revenue benefit for FY22 to $50m from $100m, with a resultant -$10m reduction in underlying earnings for the year. 

NBN has identified 1.1m premises that will benefit from the network upgrade by 2023, but challenges in the completion of maintenance and connection work, as the company moves to a new field operating model, may impact Service Stream's connection and activation work. 

The broker has retained the FY23 revenue benefit forecast of $100m. 

The Hold rating is retained and the target price decreases to $1.20 from $1.70. 

The report was published on May 18, 2021. 

Target price is $1.20 Current Price is $0.91 Difference: $0.29
If SSM meets the Canaccord Genuity target it will return approximately 32% (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 5.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 5.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.10.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 4.00 cents and EPS of 7.00 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.00.

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

SUN    SUNCORP GROUP LIMITED

Insurance – Overnight Price: $11.20

Jarden rates ((SUN)) as Buy (2) –

With covid accelerating online banking, Suncorp Group has narrowed its branch footprint by more than -25% over the past 15 months, reinvesting savings into enhancing digital platforms and increasing loan processing capacity.

Commenting on Suncorp's recent update, Jarden thinks lead lending indicators point towards early traction. The broker also expects improved turnaround times to support 52% growth in home loan lodgements in third quarter 2021, and a return to balance sheet growth.

Jarden expects these initiatives should enable more consistent bank loan growth and support revenue growth as net interest margin pressures return. But the broker suspects absolute cost-out will be critical to delivering the company's long-held ambition of a 50% cost-to-income ratio and sustainable 10%-plus return on common equity tier 1.

Given Suncorp's chequered track-record here and competitive backdrop, Jarden's forecasts adopt a more conservative outcome (53.4% FY23 Bank CTI), implying upside to already attractive value headroom (15%-plus) should the company execute to plan.

The Overweight rating and the target price of $12.00 are both retained.

This report was published on May 17, 2021. 

Target price is $12.00 Current Price is $11.20 Difference: $0.8
If SUN meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $11.83, suggesting upside of 5.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY21:

Jarden forecasts a full year FY21 dividend of 61.00 cents and EPS of 70.00 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 16.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.0, implying annual growth of 45.5%.
Current consensus DPS estimate is 54.6, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 64.00 cents and EPS of 69.00 cents.
At the last closing share price the estimated dividend yield is 5.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.3, implying annual growth of -7.9%.
Current consensus DPS estimate is 52.6, implying a prospective dividend yield of 4.7%.
Current consensus EPS estimate suggests the PER is 16.9.

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

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