Australian Broker Call *Extra* Edition – Mar 24, 2022

This story features A2 MILK COMPANY LIMITED, and other companies. For more info SHARE ANALYSIS: A2M

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)

A2M   AML   ARX   BUB   BVS   BXB   CGC   LDX   NIC   OFX   RSG   STA  

A2M    A2 MILK COMPANY LIMITED

Dairy – Overnight Price: $5.43

Bell Potter rates ((A2M)) as Buy (1) –

a2 Milk Co exports to China from both Australia and New Zealand continue to improve, up 33% and 20% in January respectively. Bell Potter reiterates potential for EPS to double by FY26 with execution of China offline expansion strategy and recovery of 50% of lost English label sales.

Further, the broker considers an exit from loss-making US assets or improvement at Mataura Valley Milk could accelerate the company's recovery.

The Buy rating is retained and the target price decreases to $7.15 from $7.70.

This report was published on March 21, 2022.

Target price is $7.15 Current Price is $5.43 Difference: $1.72
If A2M meets the Bell Potter target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $6.19, suggesting upside of 14.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 14.89 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 36.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.8, 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 36.6.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 17.81 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.49.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 34.5%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 27.2.

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

AML    AEON METALS LIMITED

Copper – Overnight Price: $0.05

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

Aeon Metals has issued a 1.6% upgrade to its Walford Creek Copper-Cobalt project resource estimate, and Bell Potter notes the consolidated resource estimate now totals 44.1m tonnes. A maiden reserve estimate is expected with a pre-feasibility study in April.

At 0.74% copper and based on current spot pricing, the broker values the project at $14,241m. Bell Potter looks to the pre-feasibility study for more detail on metallurgical test results, the proposed process route and overall processing and payability parameters.

The Buy rating is retained and the target price decreases to $0.095 from $0.105.

This report was published on March 21, 2022.

Target price is $0.10 Current Price is $0.05 Difference: $0.045
If AML meets the Bell Potter target it will return approximately 90% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.00 cents.

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: $0.72

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

As Aroa Biosurgery has a  27% revenue share from TELA Bio's OviTex product lines, Wilsons reviews 4Q results for the US-listed company.

The broker concludes that its forecasts for Aroa Biosurgery are well supported by TELA’s sales momentum and outlook. TELA's management noted it still expects the benefits to flow from the covid-induced hernia surgery backlog generated during FY21.

Wilsons retains its Overweight rating and $1.75 target price.

This report was published on March 24, 2022.

Target price is $1.75 Current Price is $0.72 Difference: $1.03
If ARX meets the Wilsons target it will return approximately 143% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.73.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 30.00.

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

BUB    BUBS AUSTRALIA LIMITED

Dairy – Overnight Price: $0.44

Bell Potter rates ((BUB)) as Speculative Buy (1) –

While Bell Potter is pleased by improving secular trade flows to China, the most upside potential for Bubs Australia comes from achieving equity-linked targets.

Happily, the company has recently announced an equity-linked distribution agreement with its largest corporate daigou customer. In addition, the broker points to a largish initial purchase order following the launch of the company's new a2 protein IMF product.

The Speculative Buy rating and $0.70 target are retained.

This report was published on March 23, 2022.

Target price is $0.70 Current Price is $0.44 Difference: $0.26
If BUB meets the Bell Potter target it will return approximately 59% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter 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 25.88.

Forecast for FY23:

Bell Potter 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 29.33.

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

BVS    BRAVURA SOLUTIONS LIMITED

Wealth Management & Investments – Overnight Price: $1.67

Jarden rates ((BVS)) as Buy (1) –

Having recently upgraded its rating for Bravura Solutions to a Buy from Overweight, Jarden revisits 1H results, and concludes Wealth Management revenues from the company's core Sonata product are improving.

Should FY22 revenue guidance be met, this will imply to the analyst that wealth management revenues grew in excess of 5%. This in turn will indicate Bravura Solutions has passed the trough for revenue and be on an improved trajectory in FY23.

Also, while tech/IT staff costs have been a challenge, the broker notes staff numbers continue to increase and the company may actually have a relative advantage over peers.

The Buy rating and $2.55 target are unchanged.

This report was published on March 24, 2022.

Target price is $2.55 Current Price is $1.67 Difference: $0.88
If BVS meets the Jarden target it will return approximately 53% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 6.90 cents and EPS of 10.90 cents.
At the last closing share price the estimated dividend yield is 4.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.32.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 8.00 cents and EPS of 12.40 cents.
At the last closing share price the estimated dividend yield is 4.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.47.

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: $9.57

Jarden rates ((BXB)) as Overweight (2) –

Jarden has a watching brief on the relationship between the rate of increase of lumber costs (the price has recently surged again) and the pricing increases for wood pallets, as it may negatively impact Brambles' margins.

The broker explains further lumber inflation may impact the capex line to a greater extent than earnings (EBIT) margins moving forward.

While inventory growth for Food & Beverage is still above long-term averages, the analyst believes less pallet availability will constrain benefits for Brambles' CHEP US business.

Jarden retains its Overweight rating and $11 target price.

This report was published on March 21, 2022.

Target price is $11.00 Current Price is $9.57 Difference: $1.43
If BXB meets the Jarden target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $11.58, suggesting upside of 20.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 36.64 cents and EPS of 52.86 cents.
At the last closing share price the estimated dividend yield is 3.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.9, implying annual growth of N/A.
Current consensus DPS estimate is 31.6, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 17.5.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 37.58 cents and EPS of 54.21 cents.
At the last closing share price the estimated dividend yield is 3.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 59.0, implying annual growth of 7.5%.
Current consensus DPS estimate is 32.0, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 16.3.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
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: $2.99

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

Bell Potter reiterates return on the $540m capital investment into acquisition and development made by Costa Group is expected to be the company's main earnings driver through to 2023.

Domestic wholesale berry pricing has remained strong, with blueberries up 16% year-on-year and raspberries up 18%, while exports of Moroccan blueberries to Europe were down -12% in December. Domestic avocado pricing remains subdued, down -60% year-on-year.

The Buy rating and target price of $3.90 are retained.

This report was published on March 24, 2022.

Target price is $3.90 Current Price is $2.99 Difference: $0.91
If CGC meets the Bell Potter target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $3.64, suggesting upside of 20.4%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 10.00 cents and EPS of 14.70 cents.
At the last closing share price the estimated dividend yield is 3.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.4, implying annual growth of 62.6%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 19.6.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 11.00 cents and EPS of 19.70 cents.
At the last closing share price the estimated dividend yield is 3.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.5, implying annual growth of 26.6%.
Current consensus DPS estimate is 12.2, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 15.5.

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

LDX    LUMOS DIAGNOSTICS HOLDINGS LIMITED

Medical Equipment & Devices – Overnight Price: $0.41

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

Bell Potter expects Lumos Diagnostics to be profitable within 2-3 years, predicting positive earnings by the end of FY23 and positive net profit by FY25.

The broker points to the company's FebriDx rapid antigen test as of particular interest. FebriDx distinguishes between viral and bacterial upper respiratory infections, minimising prescription of inaccurate antibiotics that contributes to antibiotic resistance from 'superbugs'.

An announcement from the FDA regarding FebriDx, as well as Lumos Diagnostics' ViraDx, is expected in coming months.

The Buy rating is retained and the target price decreases to $0.75 from $1.70.

This report was published on March 21, 2022.

Target price is $0.75 Current Price is $0.41 Difference: $0.34
If LDX meets the Bell Potter target it will return approximately 83% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 8.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.94.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.07.

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

NIC    NICKEL MINES LIMITED

Nickel – Overnight Price: $1.34

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

Despite input costs remaining elevated longer than forecast, Bell Potter lifts its target price for Nickel Mines to $1.88 from $1.76 due to a favourable taxation outcome. 

In a prior update, the broker didn't flinch and maintained its prior $1.76 target price in the face of concerns around Nickel Mines' joint venture partner Tsingshan being caught on the wrong side of a short squeeze in nickel prices.

After a subsequent large decline in the share price, the analyst suggests a buying opportunity now presents. Clearly, the Buy rating is maintained.

This report was published on March 24, 2022.

Target price is $1.76 Current Price is $1.34 Difference: $0.42
If NIC meets the Bell Potter target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $1.54, suggesting upside of 15.6%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 6.76 cents and EPS of 15.28 cents.
At the last closing share price the estimated dividend yield is 5.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 9.9, implying annual growth of N/A.
Current consensus DPS estimate is 6.7, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 13.4.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 12.17 cents and EPS of 30.15 cents.
At the last closing share price the estimated dividend yield is 9.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.0, implying annual growth of 31.3%.
Current consensus DPS estimate is 7.1, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 10.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OFX    OFX GROUP LIMITED

Diversified Financials – Overnight Price: $2.47

Wilsons rates ((OFX)) as Initiation of coverage with Overweight (1) –

Wilsons initiates coverage on cross-border payments specialist OFX Group with an Overweight rating and $3.14 target price. The majority of the group's revenue comes from the re-occurring corporate, online seller and enterprise markets.

The broker likes the increasing global scale, strong margins and cashflow of the business. It's felt long-term shareholder returns will be delivered even in the absence of a dominant market position.

Additionally, OFX Group may represent an attractive target for the likes of private equity, competitors, global banks and big-tech seeking to expand their ecosystem, suggests the analyst.

This report was published on March 23, 2022.

Target price is $3.14 Current Price is $2.47 Difference: $0.67
If OFX meets the Wilsons target it will return approximately 27% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of 9.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.46.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 11.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.25.

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

RSG    RESOLUTE MINING LIMITED

Gold & Silver – Overnight Price: $0.33

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

Canaccord Genuity believes the current market capitalisation for Resolute Mining understates the value of the company's assets and the outlook. Also, the balance sheet is not thought to be as stretched as the share performance implies.

The broker expects production for the March quarter will be down quarter-on-quarter due to the maintenance shutdown at the Syama roaster. However, sequentially stronger production is expected for the balance of 2022.

The Buy rating and $1.35 target are retained.

This report was published on March 23, 2022.

Target price is $1.35 Current Price is $0.33 Difference: $1.02
If RSG meets the Canaccord Genuity target it will return approximately 309% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of 4.06 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.14.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 2.70 cents and EPS of 4.06 cents.
At the last closing share price the estimated dividend yield is 8.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.14.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

STA    STRANDLINE RESOURCES LIMITED

Mineral Sands – Overnight Price: $0.40

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

Shaw and Partners lifts its target price for Strandline Resources to $0.80 from $0.71 and retains its Buy rating.

A number of variables impacted upon the target price. The company has two advanced mineral sands projects in Tanzania at Fungoni and Tajiri. The latter has just received has received its environmental certificate which paves the way for development, explains the broker.

However, the analyst lowers FY23 forecasts as the development of Fungoni has been delayed into FY24.

Meanwhile, back in Australia, following a positive visit to Coburn and also higher assumptions for zircon and rutile prices, Shaw and Partners lifts FY24 and FY25 earnings forecasts by 16% and 38%. 

This report was published on March 24, 2022.

Target price is $0.80 Current Price is $0.40 Difference: $0.4
If STA meets the Shaw and Partners target it will return approximately 100% (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 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 36.36.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 3.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.53.

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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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.

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