Australian Broker Call *Extra* Edition – Mar 23, 2022

This story features AVADA GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: AVD

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)

AVD   ELD   IMM   JLG   MMI   MZZ   RWC   SGM   TNE   UWL  

AVD    AVADA GROUP LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.89

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

Avada Group should benefit from South-East Queesland City infrastructure according to Shaw and Partners. The broker expects an existing Brisbane City Council relationship will see Avada Group's traffic control and equipment hire services called on to support projects. 

The $1.8bn infrastructure commitment includes $450m for the Brisbane Metro Woolloongabba station, $210m for Caboolture West infrasture, $190m for the Kangaroo Point Green bridge, $45m for Meadowlea infrastructure and $40m for Brisbane Valley highway upgrades. 

The Buy rating and target price of $1.40 are retained. 

This report was published on March 22, 2022.

Target price is $1.40 Current Price is $0.89 Difference: $0.51
If AVD meets the Shaw and Partners target it will return approximately 57% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 5.30 cents and EPS of 6.70 cents.
At the last closing share price the estimated dividend yield is 5.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.28.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 6.10 cents and EPS of 9.10 cents.
At the last closing share price the estimated dividend yield is 6.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.78.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $13.49

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

While Elders recently guided to strong earnings growth for the year, benefiting from increased acquisition activity and strong market conditions, Wilsons continues to expect normalisation of the company's earnings profile in the next 18-30 months. 

The company guided to 20-30% year-on-year earnings growth, highlighting improvement in Retail and Wholesale from a combination of supply constraint mitigating forward purchasing and increased activity. Earnings forecasts upgraded 10-25% through to FY24. 

The Underweight rating is retained and the target price increases to $10.55 from $10.03.

This report was published on March 22, 2022.

Target price is $10.55 Current Price is $13.49 Difference: minus $2.94 (current price is over target).
If ELD meets the Wilsons target it will return approximately minus 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $14.46, suggesting upside of 7.2%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 46.00 cents and EPS of 89.60 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 88.0, implying annual growth of -8.2%.
Current consensus DPS estimate is 49.1, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 15.3.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 47.00 cents and EPS of 78.40 cents.
At the last closing share price the estimated dividend yield is 3.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.8, implying annual growth of -7.0%.
Current consensus DPS estimate is 46.1, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 16.5.

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

IMM    IMMUTEP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.41

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

The approval of the Bristol Myers Squibb's anti-LAG-3 drug, Opdualag, should add value to Immutep's LAG-3 focused portfolio according to Wilsons, and increase corporate interest in LAG-3 treatments. 

The broker notes the drug marks the first LAG-3 drug granted FDA approval for immuno-oncology treatment, and transforms Immutep's portfolio from being centered on a prospective drug to being centred on the newest in immuno-oncology treatment. 

The Overweight rating and target price of $0.91 are retained.

This report was published on March 21, 2022.

Target price is $0.91 Current Price is $0.41 Difference: $0.5
If IMM meets the Wilsons target it will return approximately 122% (excluding dividends, fees and charges).

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

JLG    JOHNS LYNG GROUP LIMITED

Building Products & Services – Overnight Price: $8.60

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

Expected higher frequency and severity catastrophic events, plus improved insurance works market share, should benefit Johns Lyng according to Goldman Sachs. 

Recent flood events support a solid pipeline of work, driving catastrophe revenue forecasts to $150m each in FY23 and FY24, up from forecasts of $100m and $75m respectively, and supporting a long-term annual catastrophe revenue assumption of $100m. 

Opportunity in strata industry consolidation, and replication of domestic strategy in the US, should further support medium-term earnings growth, according to the broker. 

The Buy rating is retained and the target price increases to $11.35 from $9.00.

This report was published on March 21, 2022.

Target price is $11.35 Current Price is $8.60 Difference: $2.75
If JLG meets the Goldman Sachs target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 7.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 0.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 57.33.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 11.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 1.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.09.

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

MMI    METRO MINING LIMITED

Coal – Overnight Price: $0.03

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

Metro Mining has announced an additional 1.0m tonne offtake agreement with Xinfa, which Shaw and Partners notes brings 2022 volumes to 3.8m tonnes and largely secures the year's expected 4.0m tonne production. 

The company also announced three-year Contracts of Affreightment with Berg Bulk, covering 2.0m tonnes in 2022, and 1.5m tonnes each in 2023 and 2024, assisting in mitigating freight risk.  

The Buy rating and target price of $0.07 are retained. 

This report was published on March 22, 2022.

Target price is $0.07 Current Price is $0.03 Difference: $0.04
If MMI meets the Shaw and Partners target it will return approximately 133% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.33.

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

MZZ    MATADOR MINING LIMITED

Gold & Silver – Overnight Price: $0.28

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

Shaw and Partners notes results from diamond drilling at Matador Mining's Cape Ray Shear project are encouraging and include a 14 metre 4.5 grams of gold per tonne intercept, of which one metre measures at 27.4 grams of gold per tonne. 

Further, the neighbouring Valentine Gold project has been released from Provincial Environmental Approval which the broker notes may be positive for Matador Mining's own environmental approval process. 

The Buy rating and target price of $0.80 are retained.

This report was published on March 22, 2022.

Target price is $0.80 Current Price is $0.28 Difference: $0.52
If MZZ meets the Shaw and Partners target it will return approximately 186% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 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 31.11.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 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 18.67.

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

RWC    RELIANCE WORLDWIDE CORP. LIMITED

Building Products & Services – Overnight Price: $4.23

JP Morgan rates ((RWC)) as Upgrade to Overweight from Neutral (1) –

JP Morgan upgrades its rating for Reliance Worldwide to Overweight from Neutral for two reasons. 

Firstly, the broker considers the company is undervalued after recent share price falls, with shares trading at a -40% discount to the ASX200 Industrials.

Secondly, the company has been able to deliver structural improvements during the pandemic and should be well placed to either benefit in an upswing or navigate any potential slowdown.

The target is lowered to $5.30 from $5.60. JP Morgan feels emerging downside risks in Europe are already factored into the current share price.

This report was published on March 17, 2022.

Target price is $5.30 Current Price is $4.23 Difference: $1.07
If RWC meets the JP Morgan target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $6.08, suggesting upside of 43.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 10.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 2.36%.
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 27.0, implying annual growth of N/A.
Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 15.7.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 12.00 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.1, implying annual growth of 18.9%.
Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 13.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SGM    SIMS LIMITED

Steel & Scrap – Overnight Price: $21.09

Jarden rates ((SGM)) as Buy (1) –

Recent strength in global scrap metal prices has driven Jarden to upgrade its earnings per share estimates for Sims by 7.3% and 6.8% in FY22 and FY23 respectively. 

The broker notes ferrous scrap metal pricing has risen 30% over the duration of the Russia-Ukraine conflict, now around US$650 per tonne from US$500, and expects supply disruptions will support elevated pricing for some months. 

Jarden highlights Sims' stocks have rallied 27% since the start of the year, largely outperforming the domestic market. The Buy rating is retained and the target price increases to $23.00 from $17.70.

This report was published on March 18, 2022.

Target price is $23.00 Current Price is $21.09 Difference: $1.91
If SGM meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $19.72, suggesting downside of -6.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 75.70 cents and EPS of 255.70 cents.
At the last closing share price the estimated dividend yield is 3.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 240.7, implying annual growth of 111.0%.
Current consensus DPS estimate is 74.1, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 8.8.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 69.00 cents and EPS of 229.90 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 9.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 170.0, implying annual growth of -29.4%.
Current consensus DPS estimate is 56.0, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 12.4.

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

TNE    TECHNOLOGY ONE LIMITED

IT & Support – Overnight Price: $11.09

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

Ahead of TechnologyOne's first half result release, Bell Potter notes a sizeable increase in the company's software as a service annual recurring revenue is expected as the company progresses on its move away from on-premise solutions to a pure SaaS offering.

The broker reiterates a 30% SaaS annual recurring revenue growth forecast, but does note potential for upside risk, and notes that high migration to SaaS may impact on-premise revenue but should be seen as positive. 

The Buy rating is retained and the target price decreases to $14.00 from $15.00.

This report was published on March 22, 2022.

Target price is $14.00 Current Price is $11.09 Difference: $2.91
If TNE meets the Bell Potter target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $11.83, suggesting upside of 6.7%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 15.30 cents and EPS of 26.30 cents.
At the last closing share price the estimated dividend yield is 1.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 42.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.4, implying annual growth of 16.6%.
Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 42.0.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 17.60 cents and EPS of 30.40 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.3, implying annual growth of 11.0%.
Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 37.8.

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

UWL    UNITI GROUP LIMITED

Telecommunication – Overnight Price: $4.22

JP Morgan rates ((UWL)) as Overweight (1) –

JP Morgan believes there may be further bids for Uniti Group after HRL Morrison & Co made a non-binding proposal for a full takeover at $4.50/share, and remains Overweight as a result.

The current takeover proposal is subject to FIRB approval and an unanimous recommendation from the Uniti board. The $4 target price is unchanged. Shares may continue to trade at a discount to the offer price until a firm bid is made, explains the analyst.

This report was published on March 22, 2022.

Target price is $4.00 Current Price is $4.22 Difference: minus $0.22 (current price is over target).
If UWL meets the JP Morgan 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 FY22:

JP Morgan forecasts a full year FY22 dividend of 0.00 cents and EPS of 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.17.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 0.00 cents and EPS of 15.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.13.

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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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface. This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

As part of emerging new trends overseas, The Australian Broker Call *Extra* Edition also includes providers of sponsored research. Readers should bear in mind, sponsored research, while not necessarily of lower quality, has the embedded complication that the company that is the subject of the research has paid for this research. Providers of sponsored research that can potentially be included in this Report are Breakaway Research, Edison Investment Research, Independent Investment Research, NDF Research, Pitt Street Research, and TMT Analytics.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

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