Australian Broker Call *Extra* Edition – Jul 18, 2022

This story features EAGERS AUTOMOTIVE LIMITED, and other companies. For more info SHARE ANALYSIS: APE

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)

APE   ASG   BHP   CGC (2)   DMP   ERD   EVS   FBU   HVN   HXL   JAN   JBH   LDX (2)   MFG   NWC   NWS   OPY   PMV   PTM   REH   RIO   RWC   S32   SEK   SHV   TWE   WES  

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $11.36

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

In its latest market update, Eagers Automotive has lifted its first half underlying profits guidance to $195m from a previous $183-189m range, but Jarden warns strong cash in the first half will normalise in the second half. 

The sale of the Bill Buckle Auto Group will see the company report record cash in the first half according to Jarden, but with Eagers Automotive continuing to pursue WFM Motors, the broker notes a successful purchase will see the cash position normalise. 

Ahead of the vote on the WFM Motors acquisition, the broker lifts its earnings per share forecasts 5% and 6% in FY22 and FY23 respectively, accounting for contribution from the purchase. 

The Overweight rating is retained and the target price decreases to $12.37 from $14.04.

This report was published on July 13, 2022.

Target price is $12.37 Current Price is $11.36 Difference: $1.01
If APE meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $14.19, suggesting upside of 24.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 46.60 cents and EPS of 110.30 cents.
At the last closing share price the estimated dividend yield is 4.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 104.9, implying annual growth of -16.2%.
Current consensus DPS estimate is 66.9, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 10.8.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 40.40 cents and EPS of 95.80 cents.
At the last closing share price the estimated dividend yield is 3.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.86.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 96.8, implying annual growth of -7.7%.
Current consensus DPS estimate is 60.6, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 11.7.

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

ASG    AUTOSPORTS GROUP LIMITED

Automobiles & Components – Overnight Price: $1.70

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

Autosports Group has announced a -NZ$70m acquisition of Auckland City BMW. Jarden estimates margins for the dealership will exceed FY21 average margins for Autosports Group, given the market share and less competition.

After allowing for the takeover and continued strong demand within the existing business, the broker raises its EPS forecasts for FY22 and FY23 by 10.6% and 19.0%, respectively. The target price lifts to $3.32 from $3.18. Overweight.

This report was published on July 12, 2022.

Target price is $3.32 Current Price is $1.70 Difference: $1.62
If ASG meets the Jarden target it will return approximately 95% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 16.40 cents and EPS of 27.20 cents.
At the last closing share price the estimated dividend yield is 9.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.25.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 17.10 cents and EPS of 28.40 cents.
At the last closing share price the estimated dividend yield is 10.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.99.

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

BHP    BHP GROUP LIMITED

Bulks – Overnight Price: $36.10

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

Goldman Sachs highlights the Chilean Finance Minister will introduce a bill to replace the current mining profits tax with a proposal to increase copper mining royalties for large scale copper producers.

The broker notes the potential timing for the new mining royalty to be passed by the Chilean congress in the 2H22 with likely approval by the President towards year end.

Until the royalty bill is passed earnings forecasts and NAVs for BHP, RIO and S32 remain unchanged with no material impact on earnings forecasts until 2024 due to the price stability of existing contracts cites the broker.

Goldman Sachs estimates BHP Group earnings forecasts could be impacted by around -10% from FY25 for the new royalty.

BHP Group's US$20bn copper development (more than half located in Chile) could be potentially impacted cites the broker. 

Goldman Sachs reiterates a Buy rating and the price target of $42.90 is maintained.

This report was published on July 13, 2022.

Target price is $42.90 Current Price is $36.10 Difference: $6.8
If BHP meets the Goldman Sachs target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $44.34, suggesting upside of 22.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 478.63 cents and EPS of 637.71 cents.
At the last closing share price the estimated dividend yield is 13.26%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 647.5, implying annual growth of N/A.
Current consensus DPS estimate is 586.2, implying a prospective dividend yield of 16.2%.
Current consensus EPS estimate suggests the PER is 5.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 385.95 cents and EPS of 385.95 cents.
At the last closing share price the estimated dividend yield is 10.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 612.7, implying annual growth of -5.4%.
Current consensus DPS estimate is 443.7, implying a prospective dividend yield of 12.3%.
Current consensus EPS estimate suggests the PER is 5.9.

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: $2.54

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

Jarden remains positive on Costa Group and sees it as an inflation beneficiary, following a trading update that was in-line with the broker's expectations.

While wet weather has reduced citrus quality, the analysts point out it's too early in the season to draw conclusions. Earnings forecasts are left unchanged, as are the Overweight rating and $3.50 target price.

This report was published on July 14, 2022.

Target price is $3.50 Current Price is $2.54 Difference: $0.96
If CGC meets the Jarden target it will return approximately 38% (excluding dividends, fees and charges).
Current consensus price target is $3.19, suggesting upside of 25.4%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 8.80 cents and EPS of 17.20 cents.
At the last closing share price the estimated dividend yield is 3.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.1, implying annual growth of 48.9%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 9.50 cents and EPS of 19.90 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.8, implying annual growth of 33.3%.
Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 13.5.

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

---

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

Wilsons reduces its FY22 EPS forecast by -8% following a mixed trading update by Costa Group. A strong outlook for earnings growth in 2022 and 2023 is still anticipated. The target price falls to $3.22 from $3.66, while the Overweight rating remains.

The broker highlights earnings growth from the International segment in the 1H of 2022 and ongoing strong domestic pricing across categories such as Mushrooms and Tomatoes.

Management provided commentary around Citrus, which despite experiencing lower quality from weather impacts, showed strong demand and market pricing, and improved export market access.

This report was published on July 12, 2022.

Target price is $3.22 Current Price is $2.54 Difference: $0.68
If CGC meets the Wilsons target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $3.19, suggesting upside of 25.4%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 12.10 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.1, implying annual growth of 48.9%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 12.90 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 5.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.8, implying annual growth of 33.3%.
Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 13.5.

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

DMP    DOMINO'S PIZZA ENTERPRISES LIMITED

Food, Beverages & Tobacco – Overnight Price: $71.13

Goldman Sachs rates ((DMP)) as Downgrade to Sell from Buy (5) –

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs downgrades earnings for Domino's Pizza Enterprises due to lower sales/earnings in Europe and Japan from slower store growth and the impacts of rising cost inflation on margins.

The broker's earnings forecasts are 10% and 19% below FactSet consensus for FY22 & FY23, respectively.

The stock rating is downgraded to Sell from Neutral. The target price falls to $59.20 from $89.90.

This report was published on July 10, 2022.

Target price is $59.20 Current Price is $71.13 Difference: minus $11.93 (current price is over target).
If DMP meets the Goldman Sachs target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $90.76, suggesting upside of 27.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 146.00 cents and EPS of 183.00 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 38.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 204.3, implying annual growth of -4.0%.
Current consensus DPS estimate is 164.1, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 34.8.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 150.00 cents and EPS of 187.00 cents.
At the last closing share price the estimated dividend yield is 2.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 234.6, implying annual growth of 14.8%.
Current consensus DPS estimate is 184.4, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 30.3.

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

ERD    EROAD LIMITED

Transportation & Logistics – Overnight Price: $1.98

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

Upon a change of analyst for Eroad, Bell Potter alters its investment thesis, forecasts and valuation for the company. While confidence is retained in the outlook and a Buy rating maintained, the new valuation method results in the target price falling to $2.75 from $3.40. 

After the acquisition of Coretex and the “doubling down” on the North American growth strategy, the broker believes the pieces are in place to address the market for Enterprise customers and regain growth momentum, particularly in North America.

Management's FY25 revenue target implies to the analyst revenue growth of around 25% or more, in each of FY24 and FY25. Should that be achieved, earnings (EBITDA) margins are expected to approach 30%.

This report was published on July 12, 2022.

Target price is $2.75 Current Price is $1.98 Difference: $0.77
If ERD meets the Bell Potter target it will return approximately 39% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 11.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.78.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 49.17.

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

EVS    ENVIROSUITE LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.16

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

A fourth quarter update from EnviroSuite has demonstrated resilience from its more mature businesses, as well as traction from its emerging Water business, and Wilsons notes the company appears well positioned to benefit from organic growth in the coming year. 

Wilsons notes in the fourth quarter, Aviation's annual recurring revenue contribution of $33.9m was 1% above forecast,  Omnis' $18.1m was 3% above forecast, and Water's $1m contribution was in-line.

The broker expects Aviation and  Omnis to remain primary drivers of the company's annual recurring revenue in FY23.

The Market Weight rating is retained and the target price increases to $0.17 from $0.16.

This report was published on July 13, 2022.

Target price is $0.17 Current Price is $0.16 Difference: $0.01
If EVS meets the Wilsons target it will return approximately 6% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 13.33.

Forecast for FY23:

Wilsons forecasts a full year FY23 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 16.00.

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

FBU    FLETCHER BUILDING LIMITED

Building Products & Services – Overnight Price: $4.60

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

Looking forward to the August reporting season, JP Morgan anticipates the building materials sector is likely to have a mixed performance on the back of industry constraints and wet weather, but with competition overall remaining rational.

Share prices have retreated noticeably and the broker believes investors will likely look through any short-term outperformance, instead focusing on the potential moderation in demand ahead.

JP Morgan doesn't expect any surprises for Fletcher Building given guidance was reiterated on 22 June last month, and forecasts FY22
earnings (EBIT) of NZ$749m.

The broker maintains its Neutral rating and NZ$6.40 target price.

This report was published on July 12, 2022.

Current Price is $4.60. Target price not assessed.
Current consensus price target is $7.50, suggesting upside of 63.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 37.45 cents and EPS of 50.55 cents.
At the last closing share price the estimated dividend yield is 8.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.7, implying annual growth of N/A.
Current consensus DPS estimate is 35.7, implying a prospective dividend yield of 7.8%.
Current consensus EPS estimate suggests the PER is 9.1.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 38.38 cents and EPS of 57.11 cents.
At the last closing share price the estimated dividend yield is 8.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 55.5, implying annual growth of 9.5%.
Current consensus DPS estimate is 38.2, implying a prospective dividend yield of 8.3%.
Current consensus EPS estimate suggests the PER is 8.3.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

HVN    HARVEY NORMAN HOLDINGS LIMITED

Consumer Electronics – Overnight Price: $3.95

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

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs revises down the earnings forecasts for Harvey Norman from a slowing housing market and increased support to franchisees. The company's strong balance sheet has the potential to provide growth in returns to the shareholder.

Harvey Norman's low PER valuation (9.6x) and high dividend yield (9.5%) is considered attractive to investors highlights the broker.

A Buy rating is maintained and the price target is reduced to $4.50 from $5.80

This report was published on July 10, 2022.

Target price is $4.50 Current Price is $3.95 Difference: $0.55
If HVN meets the Goldman Sachs target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $4.62, suggesting upside of 17.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 45.90 cents and EPS of 51.00 cents.
At the last closing share price the estimated dividend yield is 11.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.5, implying annual growth of -25.2%.
Current consensus DPS estimate is 35.5, implying a prospective dividend yield of 9.0%.
Current consensus EPS estimate suggests the PER is 7.8.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 36.30 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 9.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.5, implying annual growth of -27.7%.
Current consensus DPS estimate is 28.5, implying a prospective dividend yield of 7.2%.
Current consensus EPS estimate suggests the PER is 10.8.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

HXL    HEXIMA LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.01

Wilsons rates ((HXL)) as No Rating (-1) –

Wilsons had previously withdrawn its rating for Hexima pending a Phase IIB trial for pezadeftide in the treatment of onychomycosis.

Management has now announced a review of data from the trial doesn't support transition into further studies, which surprises the analyst, given properties the molecule exhibited in pre-clinical and Phase I trials. It's felt Hexima is right in closing down its development.

Management estimates current and near-term liabilities (including the wind-up activities for pezadeftide) are -$9.2m. Wilsons keeps the rating withdrawn and sets no target price.

This report was published on July 12, 2022.

Current Price is $0.01. Target price not assessed.
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents.

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

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.45

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

Shaw and Partners initiates coverage on Janison Education with a Buy rating and $0.80 target price. It's felt positive drivers from covid will soon become more apparent, while a recent material reset of the cost base has led to a nimbler business.

The adoption rate and size of the addressable market has increased during the pandemic, though ongoing covid disruptions and resulting resource constraints at schools have weighed, explains the broker.

Management expects to be cash break-even in FY23, which Shaw believes adds further weight to the cost base reset and its sustainability through FY23.

As the company’s operating results and cashflow are seasonally skewed to the first half, explain the analysts, a positive catalyst is expected when investors see improvement at first half results in February 2023.

This report was published on July 13, 2022.

Target price is $0.80 Current Price is $0.45 Difference: $0.35
If JAN meets the Shaw and Partners target it will return approximately 78% (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 2.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.57.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.14.

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

JBH    JB HI-FI LIMITED

Consumer Electronics – Overnight Price: $40.38

Goldman Sachs rates ((JBH)) as Sell (5) –

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs cuts forecast earnings for JB Hi-Fi due to an expected softening in the housing sector, noting consumer electronics and appliance spending is vulnerable to declining household expenditure from rising cost pressures.

Increasing competition from Amazon is cited as potential stress on JB Hi-Fi's market share.

The broker estimates there is scope for a $150m to $250m share buy-back based on the forecast FY23/FY24 cashflow generation, if JB Hi-Fi management considers the shares to be undervalued. 

Goldman Sachs earnings estimates are -2.4% and -12.5% below consensus forecasts for FY22 & FY23, respectively.

A Sell rating is maintained and the target price is lowered to $32.00 from $39.20.

This report was published on July 10, 2022.

Target price is $32.00 Current Price is $40.38 Difference: minus $8.38 (current price is over target).
If JBH meets the Goldman Sachs target it will return approximately minus 21% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $47.00, suggesting upside of 16.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 273.00 cents and EPS of 418.00 cents.
At the last closing share price the estimated dividend yield is 6.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 419.6, implying annual growth of -4.8%.
Current consensus DPS estimate is 276.7, implying a prospective dividend yield of 6.9%.
Current consensus EPS estimate suggests the PER is 9.6.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 202.00 cents and EPS of 309.00 cents.
At the last closing share price the estimated dividend yield is 5.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 342.5, implying annual growth of -18.4%.
Current consensus DPS estimate is 223.8, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 11.8.

Market Sentiment: 0.2
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: $0.06

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

Management at Lumos Diagnostics says it will appeal the FDA's decision not to grant clearance in the US for the FebriDX. The latter is a hand-held test for acute upper respiratory tract infection confirmation, that differentiates between a viral or bacterial infection.

To reflect the FDA decision and to incorporate the current macroeconomic environment, the broker increases its weighted average cost of capital (WACC) assumption. This change results in a fall for the target price to $0.10 from $0.28. The Speculative Buy rating is unchanged.

This report was published on July 12, 2022.

Target price is $0.10 Current Price is $0.06 Difference: $0.04
If LDX meets the Bell Potter target it will return approximately 67% (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 0.72.

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 1.03.

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

---

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

Lumos Diagnostics Holdings is weighing a potential appeal to the FDA after approval was denied for FebriDx. Wilsons notes expectations for commercialisation in the US from 2022 accounts for the vast majority of the $0.50 valuation/target price.

The denial was justified because of the potential risk for false negative test results for viral infection. It was felt these may result in missed opportunities to treat patients or contribute to the further spread of sars/covid infections, explains the analyst.

The broker suggests FebriDx’s potential misuse as a de facto covid test is not the product’s intended use. The aim is to differentiate bacterial from viral infections and thereby reduce inappropriate prescribing of antibiotics.

Without making any changes to the Market Weight rating and $0.50 target in its latest research note, Wilsons states: "Until the development plan, timing and investment required to overcome FDA's regulatory objection(s) are known, investors may
seek to exit positions in the stock." 

This report was published on July 12, 2022.

Target price is $0.50 Current Price is $0.06 Difference: $0.44
If LDX meets the Wilsons target it will return approximately 733% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents.

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

MFG    MAGELLAN FINANCIAL GROUP LIMITED

Wealth Management & Investments – Overnight Price: $11.55

Jarden rates ((MFG)) as Underweight (4) –

Magellan Financial has decided to close down its FuturePay fund and return capital to shareholders, a choice Jarden described as highlighting the "lack of appetite for the FuturePay product" but in line with strategy of simplifying the business. 

The company intends to return at least the initial investment to shareholders, and will fund the shortfall which Jarden estimates to be less than -$1m. 

While Jarden finds the simplification strategy sensible, suggesting the divestment of the stakes in Barrenjoey and Finclear could be considered, the FuturePay closure sees earnings per share forecasts decrease -1.3% and -2.9% in FY22 and FY23, respectively.

The Underweight rating is retained and the target price decreases to $9.70 from $9.75.

This report was published on July 13, 2022.

Target price is $9.70 Current Price is $11.55 Difference: minus $1.85 (current price is over target).
If MFG meets the Jarden target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $11.62, suggesting upside of 0.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 188.30 cents and EPS of 224.10 cents.
At the last closing share price the estimated dividend yield is 16.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 217.1, implying annual growth of 50.1%.
Current consensus DPS estimate is 186.3, implying a prospective dividend yield of 16.1%.
Current consensus EPS estimate suggests the PER is 5.3.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 105.60 cents and EPS of 119.40 cents.
At the last closing share price the estimated dividend yield is 9.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 121.7, implying annual growth of -43.9%.
Current consensus DPS estimate is 105.6, implying a prospective dividend yield of 9.1%.
Current consensus EPS estimate suggests the PER is 9.5.

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

NWC    NEW WORLD RESOURCES LIMITED

Copper – Overnight Price: $0.03

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

A Scoping Study for New World Resources' Antler copper project outlines a high-margin underground mining development, as noted by Shaw and Partners. The broker notes the study suggests current resource will provide production of 15.4 m tonnes per annum copper in concentrate over a ten year mine life.

The results are largely in line with the broker's expectations, although grades are lower than expected due to mining dilution. The company intends to focus on improving economics by reducing mining dilution with its Pre-Feasibility Study. 

The Buy rating is retained and the target price decreases to $0.15 from $0.20.

This report was published on July 12, 2022.

Target price is $0.15 Current Price is $0.03 Difference: $0.12
If NWC meets the Shaw and Partners target it will return approximately 400% (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 4.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.65.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 7.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.39.

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

NWS    NEWS CORPORATION

Print, Radio & TV – Overnight Price: $23.11

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

Goldman Sachs lowers earnings forecasts for media companies due to slowing consumer spending estimates, risks of deteriorating macro-economic forecasts including negative GDP growth.

The broker highlights News Corp with the quality of the company's digital assets (REA, Move & Dow Jones) as drivers for asset revaluations and medium term earnings growth. 

Goldman Sachs lowers the News Corp earnings estimates by -2% and -7% for FY22 & FY23, respectively due to the weaker macro-economic outlook.

In the same update, the broker mentions a Buy rating is maintained for Nine Entertainment ((NEC)) (target price $2.60), Omni Bridgeway ((OML)) (target price $1.60) as well as a Sell on Seven West Media ((SWM)) (target price $1.60).

News Corp is removed from the conviction Buy list.

A Buy rating is maintained and the analyst lowers the target price to $32.00 from $40.20.

This report was published on July 10, 2022.

Target price is $32.00 Current Price is $23.11 Difference: $8.89
If NWS meets the Goldman Sachs target it will return approximately 38% (excluding dividends, fees and charges).
Current consensus price target is $34.63, suggesting upside of 49.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 EPS of 124.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 128.2, implying annual growth of N/A.
Current consensus DPS estimate is 31.6, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 112.33 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 138.8, implying annual growth of 8.3%.
Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 16.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

OPY    OPENPAY GROUP LIMITED

Business & Consumer Credit – Overnight Price: $0.21

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

Shaw and Partners notes Openpay Group's momentum continued into June, with sales up 75% on the previous comparable period to $2.9m in the month, or $32m for the year, and total transaction value up 65% on the previous comparable period to a record $35.4m, or $413m for the year. 

The broker expects focus will be on getting back to profitability in Australia and New Zealand by June 2023, highlighting unlike peers, Openpay Group is managing bad debt, and has removed itself from competitive geographies and sectors.

The Buy rating and target price of $1.00 are retained.

This report was published on July 12, 2022.

Target price is $1.00 Current Price is $0.21 Difference: $0.79
If OPY meets the Shaw and Partners target it will return approximately 376% (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 28.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.75.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 11.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.88.

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

PMV    PREMIER INVESTMENTS LIMITED

Apparel & Footwear – Overnight Price: $20.05

Goldman Sachs rates ((PMV)) as Upgrade to Neutral from Sell (3) –

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs suggests the current Premier Investments share price reflects concerns over higher than normal inventory levels and margin pressures.

Premier Investments built up a strong balance sheet over FY20-22 and the broker notes there is scope for a capital return to shareholders of between $150-$200m based on the forward cashflow forecasts.

The price target is lowered to $19.50 from $22.30 and the rating upgraded to Neutral from Sell.

This report was published on July 10, 2022.

Target price is $19.50 Current Price is $20.05 Difference: minus $0.55 (current price is over target).
If PMV meets the Goldman Sachs target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $26.35, suggesting upside of 31.4%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 92.00 cents and EPS of 134.00 cents.
At the last closing share price the estimated dividend yield is 4.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.6, implying annual growth of -8.5%.
Current consensus DPS estimate is 101.5, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 12.8.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 95.00 cents and EPS of 113.00 cents.
At the last closing share price the estimated dividend yield is 4.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 136.8, implying annual growth of -12.6%.
Current consensus DPS estimate is 98.6, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 14.7.

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

PTM    PLATINUM ASSET MANAGEMENT LIMITED

Wealth Management & Investments – Overnight Price: $1.60

Jarden rates ((PTM)) as Underweight (4) –

Outflows of -$304m from Platinum Asset Management in the fourth quarter exceeded Jarden's expected -$212m, and drove total quarterly outflows to -$700m. 

The broker notes ongoing improvement from the International and Asia funds, with International three-year relative performance now -2.5%, up from -7.6% in March, and Asia now at 4.5%, up from 2.9%. 

Despite performance improvement from flagship funds, the broker continues to anticipate near-term outflows, and is forecasting outflows of -$1.9bn in FY23. The Underweight rating is retained and the target price decreases to $1.55 from $1.75.

This report was published on July 13, 2022.

Target price is $1.55 Current Price is $1.60 Difference: minus $0.05 (current price is over target).
If PTM meets the Jarden target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $2.06, suggesting upside of 29.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 17.60 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 11.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.8, implying annual growth of -26.2%.
Current consensus DPS estimate is 19.3, implying a prospective dividend yield of 12.1%.
Current consensus EPS estimate suggests the PER is 7.7.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 13.50 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 8.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.5, implying annual growth of -15.9%.
Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 10.2%.
Current consensus EPS estimate suggests the PER is 9.1.

Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

REH    REECE LIMITED

Furniture & Renovation – Overnight Price: $13.90

JP Morgan rates ((REH)) as Underweight (5) –

Looking forward to the August reporting season, JP Morgan anticipates the building materials sector is likely to have a mixed performance on the back of industry constraints and wet weather, but with competition overall remaining rational.

Share prices have retreated noticeably and the analysts believe investors will likely look through any short-term outperformance, instead focusing on the potential moderation in demand ahead.

In adopting a conservative approach to the US rollout, the broker anticipates an in-line result for Reece. Underlying earnings (EBIT) of
$571m are forecast for FY22, up 16% versus the previous corresponding period.

The Underweight rating and $14.35 target are retained.

This report was published on July 12, 2022.

Target price is $17.60 Current Price is $13.90 Difference: $3.7
If REH meets the JP Morgan target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $18.54, suggesting upside of 33.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 23.00 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 1.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 56.4, implying annual growth of 27.6%.
Current consensus DPS estimate is 23.9, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 24.6.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 28.00 cents and EPS of 63.00 cents.
At the last closing share price the estimated dividend yield is 2.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.7, implying annual growth of 14.7%.
Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 21.5.

Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

RIO    RIO TINTO LIMITED

Bulks – Overnight Price: $93.27

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

Goldman Sachs highlights the Chilean Finance Minister will introduce a bill to replace the current mining profits tax with a proposal to increase copper mining royalties for large scale copper producers.

The broker notes the potential timing for the new mining royalty to be passed by the Chilean congress in the 2H22 with likely approval by the President towards year end.

Until the royalty bill is passed earnings forecasts and NAVs for BHP, RIO and S32 remain unchanged with no material impact on earnings forecasts until 2024 due to the price stability of existing contracts cites the broker.

Goldman Sachs estimates the earnings forecasts for Rio Tinto could be impacted by around -5% in 2024 and the royalty could also impact the future investments in Escondida.

A Buy rating is maintained and the price target is retained at $125.30. 

This report was published on July 13, 2022.

Target price is $125.30 Current Price is $93.27 Difference: $32.03
If RIO meets the Goldman Sachs target it will return approximately 34% (excluding dividends, fees and charges).
Current consensus price target is $115.50, suggesting upside of 23.8%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 968.32 cents and EPS of 1193.80 cents.
At the last closing share price the estimated dividend yield is 10.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1853.2, implying annual growth of N/A.
Current consensus DPS estimate is 1310.7, implying a prospective dividend yield of 14.1%.
Current consensus EPS estimate suggests the PER is 5.0.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 1023.66 cents and EPS of 1135.70 cents.
At the last closing share price the estimated dividend yield is 10.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1535.2, implying annual growth of -17.2%.
Current consensus DPS estimate is 1084.4, implying a prospective dividend yield of 11.6%.
Current consensus EPS estimate suggests the PER is 6.1.

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

RWC    RELIANCE WORLDWIDE CORP. LIMITED

Building Products & Services – Overnight Price: $4.24

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

Looking forward to the August reporting season, JP Morgan anticipates the building materials sector is likely to have a mixed performance on the back of industry constraints and wet weather, but with competition overall remaining rational.

Share prices have retreated noticeably and the broker believes investors will likely look through any short-term outperformance, instead focusing on the potential moderation in demand ahead.

Given a resilient share price leading into August, JP Morgan feels expectations are high for Reliance Worldwide's results. Underlying earnings (EBIT) of US$219m are forecast for FY22, along with a US$5.5cps dividend.

The Overweight rating and $5.30 target price are unchanged.

This report was published on July 12, 2022.

Target price is $5.30 Current Price is $4.24 Difference: $1.06
If RWC meets the JP Morgan target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $5.20, suggesting upside of 22.7%(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 21.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.2, implying annual growth of N/A.
Current consensus DPS estimate is 13.9, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 16.2.

Forecast for FY23:

JP Morgan 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 2.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.7, implying annual growth of 21.0%.
Current consensus DPS estimate is 16.3, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 13.4.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $3.41

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

Goldman Sachs highlights the Chilean Finance Minister will introduce a bill to replace the current mining profits tax with a proposal to increase copper mining royalties for large scale copper producers.

The broker notes the potential timing for the new mining royalty to be passed by the Chilean congress in the 2H22 with likely approval by the President towards year end.

Until the royalty bill is passed earnings forecasts and NAVs for BHP, RIO and S32 remain unchanged with no material impact on earnings forecasts until 2024 due to the price stability of existing contracts cites the broker.

Goldman Sachs notes earnings forecasts for South32 are unlikely to be impacted until FY29 due to the tax stability agreement for Sierra Gorda which expires in 2028 and the company will probably go ahead with the 4th milling line

Buy rating retained with a $5.00 price target.

This report was published on July 13, 2022.

Target price is $5.00 Current Price is $3.41 Difference: $1.59
If S32 meets the Goldman Sachs target it will return approximately 47% (excluding dividends, fees and charges).
Current consensus price target is $5.60, suggesting upside of 64.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 37.21 cents and EPS of 71.93 cents.
At the last closing share price the estimated dividend yield is 10.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.1, implying annual growth of N/A.
Current consensus DPS estimate is 38.8, implying a prospective dividend yield of 11.4%.
Current consensus EPS estimate suggests the PER is 4.0.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 50.49 cents and EPS of 67.78 cents.
At the last closing share price the estimated dividend yield is 14.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 98.3, implying annual growth of 14.2%.
Current consensus DPS estimate is 44.6, implying a prospective dividend yield of 13.1%.
Current consensus EPS estimate suggests the PER is 3.5.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SEK    SEEK LIMITED

Jobs & Skilled Labour Services – Overnight Price: $21.66

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

With consensus expectations for Seek's earnings and net profit both 1-2% above company guidance, Jarden notes Seek would need to beat guidance to meet expectations.

The broker notes indicators suggest job volumes will remain elevated at least in the next six months, supporting a strong start to FY23 for Seek and providing the company an opportunity to better realise benefits of its dynamic pricing. 

The Overweight rating is retained and the target price decreases to $34.80 from $40.80, but earnings per share forecasts are retained through to FY24. 

This report was published on July 13, 2022.

Target price is $34.80 Current Price is $21.66 Difference: $13.14
If SEK meets the Jarden target it will return approximately 61% (excluding dividends, fees and charges).
Current consensus price target is $31.87, suggesting upside of 47.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Jarden forecasts a full year FY22 dividend of 50.90 cents and EPS of 68.40 cents.
At the last closing share price the estimated dividend yield is 2.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 70.2, implying annual growth of 101.0%.
Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 30.9.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 60.40 cents and EPS of 80.60 cents.
At the last closing share price the estimated dividend yield is 2.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.2, implying annual growth of 5.7%.
Current consensus DPS estimate is 44.0, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 29.2.

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

SHV    SELECT HARVESTS LIMITED

Agriculture – Overnight Price: $5.18

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

Wilsons anticipates a tailwind for Select Harvests from higher almond prices following the USDA/NASS Objective Estimate for the California almond crop which surprised industry experts to the downside.

While the overall bearing area increased, weather conditions have negatively impacted yields, explains the analyst. The Overweight rating and $6.77 target price are unchanged.

This report was published on July 12, 2022.

Target price is $6.77 Current Price is $5.18 Difference: $1.59
If SHV meets the Wilsons target it will return approximately 31% (excluding dividends, fees and charges).
The company's fiscal year ends in September.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 1.50 cents and EPS of 5.80 cents.
At the last closing share price the estimated dividend yield is 0.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 89.31.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 9.10 cents and EPS of 16.60 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.20.

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

TWE    TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco – Overnight Price: $11.58

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

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs notes uncertainty for the Asian sales outlook where volumes ex-China are slowing for Treasury Wine Estates. 

Lower bulk wine pricing benefits the company in the short term plus higher Penfold investments in Asia, lower margins, argues the broker.

Treasury Wine Estates' Americas recovery path continues post the disposal of commercial volumes and new outlets such as cellar doors, Goldman Sachs highlights.

The broker lowers earnings forecasts -3.5% and 9.2%, respectively for FY22 & FY23 due to margin pressure from higher Penfolds marketing spend.

The price target is lowered to $11.10 from $11.90 and the Neutral rating is maintained.

This report was published on July 10, 2022.

Target price is $11.10 Current Price is $11.58 Difference: minus $0.48 (current price is over target).
If TWE meets the Goldman Sachs target it will return approximately minus 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $13.41, suggesting upside of 15.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 28.00 cents and EPS of 43.00 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 26.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.3, implying annual growth of 27.8%.
Current consensus DPS estimate is 27.3, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 26.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 32.00 cents and EPS of 49.00 cents.
At the last closing share price the estimated dividend yield is 2.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.8, implying annual growth of 23.7%.
Current consensus DPS estimate is 35.6, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 21.1.

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

WES    WESFARMERS LIMITED

Consumer Products & Services – Overnight Price: $45.93

Goldman Sachs rates ((WES)) as Sell (5) –

Goldman Sachs reviews the outlook for Australian discretionary consumption expenditure based on the latest forecasts for household income and high inflation from the macro economic team.

The broker analysed historical savings rates and savings usage to conclude a preference for defensive goods in the 'premium/functional sector. 

Retailers exposed to housing, mass apparel and general merchandise are most at risk cites Goldman Sachs and overall the broker lowers sales and margin outlook.

Goldman Sachs lowers Wesfarmers' earnings forecasts due to expectations of a weaker housing sector impact on Bunnings.

Earnings estimates for the other Wesfarmers' divisions remain unchanged.

Goldman Sachs earnings forecasts for the company are 3.7% above consensus for FY22 and -5.9% below consensus in FY23.

The target price is lowered to $35.90 from $40 and a Sell rating is maintained.

This report was published on July 10, 2022.

Target price is $35.90 Current Price is $45.93 Difference: minus $10.03 (current price is over target).
If WES meets the Goldman Sachs target it will return approximately minus 22% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $48.43, suggesting upside of 5.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 172.00 cents and EPS of 203.00 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 194.0, implying annual growth of -7.8%.
Current consensus DPS estimate is 162.6, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 23.7.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 169.00 cents and EPS of 196.00 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 23.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 203.2, implying annual growth of 4.7%.
Current consensus DPS estimate is 173.2, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 22.6.

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

---

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

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

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

Click to view our Glossary of Financial Terms