Australian Broker Call *Extra* Edition – Sep 02, 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)

AKE   ALG   APE (3)   APX (2)   BCI   BSX   CAJ   CCX   CSX   DTC   EXP   GEM   INA   MPL   NHF   NWL   NXS   PFP   PGC   RDT   REG   RHC   RRL   SHA   WHC (2)   WOW  

AKE    ALLKEM LIMITED

New Battery Elements – Overnight Price: $13.67

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

Allkem 's FY22 result missed Bell Potter's forecasts and no dividend was declared.

Nonetheless, the broker describes the result as a big turnaround on the previous year, thanks to higher sales at Mt Cattlin and strong commodity prices.

The company emerged with net cash of $350m and a strong balance sheet to fund projects. Management guided to strong prices in FY23 and most projects are on track save for delays at Mt Cattlin.

Buy rating retained. Target price rises to $18.76 from $17.43.

This report was published on August 25, 2022.

Target price is $18.76 Current Price is $13.67 Difference: $5.09
If AKE meets the Bell Potter target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $15.69, suggesting upside of 14.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 15.00 cents and EPS of 125.80 cents.
At the last closing share price the estimated dividend yield is 1.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 103.4, implying annual growth of 45.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 13.2.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 40.00 cents and EPS of 153.70 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 133.9, implying annual growth of 29.5%.
Current consensus DPS estimate is 20.2, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 10.2.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ALG    ARDENT LEISURE GROUP LIMITED

Travel, Leisure & Tourism – Overnight Price: $0.62

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

Ardent Leisure's FY22 revenue of $49.5m exceeded the $47.7m forecast by Canaccord Genuity, while earnings (EBITDA) were a $1.9m beat.

The broker sees prospects for a material turnaround in Theme Park operating performance, with 2H ticket sales the strongest since FY17. A large jump in 2H per capita spend is also noted.

Canaccord's $0.75 target price, down from $0.76, is a sum of the $0.31 in cash retained from the Main Event sale and the balance of $0.44 for Theme Park assets.

The Buy rating is unchanged.

This report was published on August 26, 2022.

Target price is $0.75 Current Price is $0.62 Difference: $0.13
If ALG meets the Canaccord Genuity target it will return approximately 21% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 31.00.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 62.00.

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

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $12.96

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

Eagers Automotive's June first-half result met guidance. Revenue fell -4% shy of Bell Potter's forecasts while margins proved a slight beat.

No FY22 guidance was provided but management expects demand will continue to outpace supply in the second half and that the like-for-like growth in the order book grew in August providing a solid base heading into the second half and 2023.

The dividend missed the broker's forecast by -0.5c and the broker shaves its dividend forecast accordingly.

Buy rating retained. Target price rises 2% to $15 from $14.75.

This report was published on August 25, 2022.

Target price is $15.00 Current Price is $12.96 Difference: $2.04
If APE meets the Bell Potter target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $14.30, suggesting upside of 10.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 47.00 cents and EPS of 117.10 cents.
At the last closing share price the estimated dividend yield is 3.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.07.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 106.0, implying annual growth of -15.4%.
Current consensus DPS estimate is 64.6, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 47.00 cents and EPS of 91.40 cents.
At the last closing share price the estimated dividend yield is 3.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.4, implying annual growth of -3.4%.
Current consensus DPS estimate is 61.6, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 12.7.

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

---

Moelis rates ((APE)) as Buy (1) –

Eagers Automotive delivered first half revenue of $4.2bn, earnings of $219.7m and net profit of $171.1m, all largely in line with Moelis' expectations. 

Strong demand underpinned company performance, and with no signs of demand slowing, the broker anticipates margins will remain elevated through the rest of the year, and begin to normalise in 2023.

Given its strong balance sheet, Moelis expects the company will continue to pursue acquisition opportunities 

The Buy rating is retained and the target price decreases to $15.51 from $16.96.

This report was published on August 25, 2022.

Target price is $15.51 Current Price is $12.96 Difference: $2.55
If APE meets the Moelis target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $14.30, suggesting upside of 10.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 65.50 cents and EPS of 101.10 cents.
At the last closing share price the estimated dividend yield is 5.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 106.0, implying annual growth of -15.4%.
Current consensus DPS estimate is 64.6, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 58.10 cents and EPS of 90.20 cents.
At the last closing share price the estimated dividend yield is 4.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.4, implying annual growth of -3.4%.
Current consensus DPS estimate is 61.6, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 12.7.

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

---

Wilsons rates ((APE)) as Downgrade to Market Weight from Overweight (3) –

Wilsons makes only small changes to forecasts for Eagers Automotive as 1H results were in line with recent guidance. On a 12 month view the share price now reflects fair value and the rating is downgraded to Market Weight from Overweight.

In further justification for the downgrade, the broker points out Eagers Automotive trades at a notable premium to peers Peter
Warren Automotive ((PWR)) and Autosports Group ((ASG)).

A changed valuation method employed by the analyst results in a target price fall to $13.20 from $13.77.

This report was published on August 26, 2022.

Target price is $13.20 Current Price is $12.96 Difference: $0.24
If APE meets the Wilsons target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $14.30, suggesting upside of 10.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 57.00 cents and EPS of 102.40 cents.
At the last closing share price the estimated dividend yield is 4.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 106.0, implying annual growth of -15.4%.
Current consensus DPS estimate is 64.6, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 59.00 cents and EPS of 101.10 cents.
At the last closing share price the estimated dividend yield is 4.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.4, implying annual growth of -3.4%.
Current consensus DPS estimate is 61.6, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 12.7.

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

APX    APPEN LIMITED

IT & Support – Overnight Price: $3.60

Bell Potter rates ((APX)) as Upgrade to Hold from Sell (3) –

Appen's June first half result met guidance but the non-guided dividend missed Bell Potter's forecast.

The broker says the earnings (EBITDA) loss in the New Markets division was higher than it had expected, but it was offset by a stronger performance from the Global Services division.

No guidance was provided although management reports year to date orders are steady on the previous corresponding half but expects the conversion rate of forward orders will be lower, and says the FY22 EBITDA margin is likely to be sharply lower.

EBITDA forecasts are downgraded accordingly. FY22 EPS forecasts are raised and FY23 EPS forecasts are reduced.

Rating upgraded to Hold from Sell. Target price is steady at $4.25.

This report was published on September 1, 2022.

Target price is $4.25 Current Price is $3.60 Difference: $0.65
If APX meets the Bell Potter target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $3.57, suggesting downside of -0.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 3.00 cents and EPS of 6.70 cents.
At the last closing share price the estimated dividend yield is 0.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of -80.3%.
Current consensus DPS estimate is 0.9, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 59.0.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 3.00 cents and EPS of 17.90 cents.
At the last closing share price the estimated dividend yield is 0.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of 167.2%.
Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 22.1.

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

---

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

In a trading update, Appen revealed July’s weakness has continued into August. Management also “expect FY22 EBITDA and FY22 EBITDA margin to be materially lower than FY21 due to lower revenues” and higher operating costs from greater investments.

The broker lowers its FY22-FY24 EBITDA forecasts by -31% to -43% and reduces its target price by -9% to $4.03 from $4.44. The Market Weight rating is unchanged.

This report was published on August 26, 2022.

Target price is $4.03 Current Price is $3.60 Difference: $0.43
If APX meets the Wilsons target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $3.57, suggesting downside of -0.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 7.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 50.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.1, implying annual growth of -80.3%.
Current consensus DPS estimate is 0.9, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 59.0.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 69.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of 167.2%.
Current consensus DPS estimate is 3.1, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 22.1.

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

BCI    BCI MINERALS LIMITED

Iron Ore – Overnight Price: $0.24

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

BCI Minerals's FY22 result proved a big miss on Bell Potter's forecasts due to administrative costs and Mardie development expenses as expansion ramped up. EPS forecasts slump accordingly.

Iron Valley earnings (EBITDA) outpaced but not enough to beat the cost hit. Net cash sits at $212m excluding leases and the broker notes the company can draw down $100m in convertible notes for project financing.

Changes in the C-suite included: CFO Kerryl Bradshaw has been appointed interim CEO, replacing Alwayn Vorster, managing director.

Buy rating retained, the broker appreciating the scale and position of the Mardie Salt and SOP project on the global cost curve; its 60-year-plus mine life; carbon profile; earnings potential; and its strong credentials with government-backed debt agencies and commercial lenders. Target price is steady at 50c.

This report was published on August 25, 2022.

Target price is $0.50 Current Price is $0.24 Difference: $0.26
If BCI meets the Bell Potter target it will return approximately 108% (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 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 60.00.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.25 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 96.00.

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

BSX    BLACKSTONE MINERALS LIMITED

New Battery Elements – Overnight Price: $0.19

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

Shaw and Partners lowers its price target for Blackstone Minerals to $0.80 from $1.50 after anticipating US$400m of equity raises in 2023. These raises are now estimated to have a dilutionary impact of -50cps versus the -15cps previously expected.

Providing some offset is the broker's 10-20% lift in nickel price estimates across the forecast period.

The analyst expects first production in 2025 and steady state in 2027 from the restarted open pit mine at Ban Phuc in Northern Vietnam.

This report was published on August 26, 2022.

Target price is $0.80 Current Price is $0.19 Difference: $0.61
If BSX meets the Shaw and Partners target it will return approximately 321% (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 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.18.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 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 8.26.

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

CAJ    CAPITOL HEALTH LIMITED

Healthcare services – Overnight Price: $0.32

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

Wilsons assesses a solid FY22 result for Capitol Health. Revenue growth of 3% and underlying earnings (EBITDA) were in line with the analyst's forecasts, as was the 0.5c final dividend.

The company also announced the acquisition of Future Medical Imaging, which the analyst suggests will lead to 36% EPS growth for FY23. Wilsons believes investors may now acquire shares not only for corporate appeal but also for earnings growth.

The Overweight rating is retained, while the target rises to $0.42 from $0.40.

This report was published on August 26, 2022.

Target price is $0.42 Current Price is $0.32 Difference: $0.1
If CAJ meets the Wilsons target it will return approximately 31% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 1.20 cents and EPS of 1.70 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.82.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 1.30 cents and EPS of 1.80 cents.
At the last closing share price the estimated dividend yield is 4.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.78.

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

CCX    CITY CHIC COLLECTIVE LIMITED

Apparel & Footwear – Overnight Price: $1.59

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

Revenue and gross margins for FY22 were in line with Wilsons forecasts and a share price dip in reaction to results provides a buying opportunity, according to the analyst.

Management expects ongoing profitable growth in FY23 and strong free cash flow as inventory levels unwind, resulting in a net cash
position in the 2H.

The broker lowers its target to $2.50 from $3.20 after earnings forecast downgrades driven by changes to US/Australian online sales assumptions. Avenue has begun FY23 slower than expected, while online growth is negative in Australia as customers return to stores.

Forecast gross margins also decline, after the analyst changes the compositional mix. The Overweight rating is maintained.

This report was published on August 26, 2022.

Target price is $2.50 Current Price is $1.59 Difference: $0.91
If CCX meets the Wilsons target it will return approximately 57% (excluding dividends, fees and charges).
Current consensus price target is $2.52, suggesting upside of 58.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 318.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.5, implying annual growth of 29.8%.
Current consensus DPS estimate is 2.2, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 12.7.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 100.00 cents and EPS of 25.90 cents.
At the last closing share price the estimated dividend yield is 62.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.2, implying annual growth of 13.6%.
Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 11.2.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CSX    CLEANSPACE HOLDINGS LIMITED

Medical Equipment & Devices – Overnight Price: $0.71

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

FY22 sales for CleanSpace were an -11% miss versus Wilsons' forecast after 2H declines for the Healthcare and Industrial businesses.

In a key reversion to the pre-pandemic sales mix, the broker feels the near-term outlook is dependent upon the Industrial business performance, while Healthcare sales, particularly in the US, may suffer from a lack of consumables usage.

The analyst cuts FY23-24 revenue estimates by -18%-19%, resulting in around -30% deeper losses across the forecast period, and the target falls to $0.71 from $1.11. The Market Weight rating is unchanged.

This report was published on August 26, 2022.

Target price is $0.71 Current Price is $0.71 Difference: $0
If CSX meets the Wilsons target it will return approximately 0% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons 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 12.24.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 9.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.55.

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

DTC    DAMSTRA HOLDINGS LIMITED

Software & Services – Overnight Price: $0.16

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

Damstra Holdings delivered full year operating revenue of $29.3m, up 7% year-on-year, and gross profit of $20.3m, down -6% year-on-year. Wilsons highlighted gross margins declined to 66% from 74% over the year.

Looking ahead, the broker notes company revenue guidance implies 9-16% growth over the next year, but guidance suggests FY23 revenue will reach where the company had hoped FY22 would land. 

The Market Weight rating and target price of $0.20 are retained.

This report was published on August 25, 2022.

Target price is $0.20 Current Price is $0.16 Difference: $0.04
If DTC meets the Wilsons target it will return approximately 25% (excluding dividends, fees and charges).

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

EXP    EXPERIENCE CO LIMITED

Travel, Leisure & Tourism – Overnight Price: $0.22

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

FY22 results for Experience Co were a bit better than Canaccord Genuity's expectations with the 2H showing some improvement against the 1H, though cost pressures from fuel and labour shortages weighed.

The analyst takes heart from the extent of strength in Far North Queensland operations (in the 4Q and for July 2022). There's considered to be scope for a much stronger FY23 for Great Barrier Reef Experiences and for Skydiving.

The resumption of international inbound visitation is also underway, according to the broker. A Buy rating is kept, while the target slips to $0.29 from $0.30.

This report was published on August 26, 2022.

Target price is $0.29 Current Price is $0.22 Difference: $0.07
If EXP meets the Canaccord Genuity target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.00.

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

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $0.98

Moelis rates ((GEM)) as Hold (3) –

With G8 Education reporting first half earnings of $21m, Moelis has lifted its earnings forecasts 3% and 5% in 2022 and 2023 respectively, to $74.0m and $99.0m. 

The broker noted G8 Education reported both occupancy and profitability growth in the second quarter, with the company implementing price rises to offset inflationary pressures.

The broker anticipates further occupancy rises of 2 percentage points in 2023, noting execution of the the company's $13-15m cost out program could offer upside.

The Hold rating is retained and the target price decreases to $1.11 from $1.20.

This report was published on August 25, 2022.

Target price is $1.11 Current Price is $0.98 Difference: $0.13
If GEM meets the Moelis target it will return approximately 13% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 3.00 cents and EPS of 5.10 cents.
At the last closing share price the estimated dividend yield is 3.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.22.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 5.40 cents and EPS of 7.30 cents.
At the last closing share price the estimated dividend yield is 5.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.42.

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

INA    INGENIA COMMUNITIES GROUP

Aged Care & Seniors – Overnight Price: $4.18

Moelis rates ((INA)) as Buy (1) –

Moelis assumes 525 settlements in FY23, the low end of guidance, with construction challenges expected to persist through the financial year, and lowers its target to $5.13 from $5.58.

Meanwhile, FY22 earnings (EBIT) came in 8% above the previous corresponding period.

Forward bookings for the Holiday division are currently 30% above the previous corresponding period and the analyst assumes modest earnings margin expansion over FY23 with increased scale.

The outlook is also considered strong for Lifestyle Rental, where the portfolio provides exposure to a defensive-growth annuity stream, explains the broker. The Hold rating is unchanged.

This report was published on August 26, 2022.

Target price is $5.13 Current Price is $4.18 Difference: $0.95
If INA meets the Moelis target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 12.50 cents and EPS of 25.00 cents.
At the last closing share price the estimated dividend yield is 2.99%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.72.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 15.10 cents and EPS of 30.10 cents.
At the last closing share price the estimated dividend yield is 3.61%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.89.

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

MPL    MEDIBANK PRIVATE LIMITED

Insurance – Overnight Price: $3.68

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

Jarden notes private health insurance underwriting profitability improved significantly over the last year, and saw net margins improve to 7.0% from 5.0% in the previous comparable period, as claims activity remained subdued with total payments down -5.0% in the June quarter.

The broker noted policy growth as of March was up 2.7% year-on-year, while revenue growth per policy increased 2.8%. 

The broker considers Medibank Private's outlook robust despite affordability headwinds. The Overweight rating and target price of $3.50 are retained.

This report was published on August 24, 2022.

Target price is $3.50 Current Price is $3.68 Difference: minus $0.18 (current price is over target).
If MPL meets the Jarden target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.76, suggesting upside of 2.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 15.60 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 4.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.5, implying annual growth of 29.4%.
Current consensus DPS estimate is 15.0, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 19.9.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 16.30 cents and EPS of 19.10 cents.
At the last closing share price the estimated dividend yield is 4.43%.
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 18.8, implying annual growth of 1.6%.
Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 19.6.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NHF    NIB HOLDINGS LIMITED

Insurance – Overnight Price: $8.08

Jarden rates ((NHF)) as Neutral (3) –

Jarden notes private health insurance underwriting profitability improved significantly over the last year, and saw net margins improve to 7.0% from 5.0% in the previous comparable period, as claims activity remained subdued with total payments down -5.0% in the June quarter.

The broker noted policy growth as of March was up 2.7% year-on-year, while revenue growth per policy increased 2.8%. 

The broker considers nib Holdings' outlook robust despite affordability headwinds. The Neutral rating and target price of $7.50 are retained.

This report was published on August 24, 2022.

Target price is $7.50 Current Price is $8.08 Difference: minus $0.58 (current price is over target).
If NHF meets the Jarden target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $7.73, suggesting downside of -4.3%(ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 41.5, implying annual growth of 40.2%.
Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 19.5.

Forecast for FY24:

Current consensus EPS estimate is 42.5, implying annual growth of 2.4%.
Current consensus DPS estimate is 27.4, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 19.0.

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

NWL    NETWEALTH GROUP LIMITED

Wealth Management & Investments – Overnight Price: $12.62

Jarden rates ((NWL)) as Neutral (3) –

Jarden is expecting Netwealth Group can deliver a strong earnings growth rebound in the coming year, anticipating earnings margins will rebound to 52% in FY23 after declining to 49% on the back of a slow FY22.

Improved market momentum in the early weeks of the new financial year has seen Jarden lift its earnings per share forecasts 6.5% and 6.6% for FY23 and FY24 respectively. 

The Neutral rating is retained and the target price increases to $14.30 from $13.60.

This report was published on August 24, 2022.

Target price is $14.30 Current Price is $12.62 Difference: $1.68
If NWL meets the Jarden target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $15.12, suggesting upside of 19.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 27.20 cents and EPS of 32.10 cents.
At the last closing share price the estimated dividend yield is 2.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.6, implying annual growth of 29.9%.
Current consensus DPS estimate is 24.8, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 42.6.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 34.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 2.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.3, implying annual growth of 26.0%.
Current consensus DPS estimate is 31.2, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 33.8.

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

NXS    NEXT SCIENCE LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.89

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

Next Science's first half sales were largely in line with Wilsons' expectations, while earnings during the half were impacted by increased expenditure with the company establishing its own direct sales team. 

With distribution partners confirmed, Wilsons expects the company will be able to deliver on revenue growth in the second half and its forecasts imply a doubling of Xperience sales in the period. The broker notes deeper penetration of established accounts will be crucial to growth of Xperience. 

The Overweight rating and target price of $1.80 are retained.

This report was published on August 26, 2022.

Target price is $1.80 Current Price is $0.89 Difference: $0.91
If NXS meets the Wilsons target it will return approximately 102% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 6.27 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.20.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.95 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 45.64.

This company reports in USD. 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

PFP    PROPEL FUNERAL PARTNERS LIMITED

Consumer Products & Services – Overnight Price: $4.74

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

Propel Funeral Partners' FY22 result outpaced consensus forecasts by 4% and Bell Potter by 5%, thanks to strong volumes (up 8.9%) as industry death rates rise 10%, along with average revenue per funeral (up 6%) as covid unwinds.

The broker expects strong organic growth will combine with announced and expected acquisitions to drive small margin increases.

Bell Potter remains of the opinion that Propel is in the early stages of consolidating a large and fragmented market.

Buy rating retained. Target price rises to $5.60 from $5.40.

This report was published on August 25, 2022.

Target price is $5.60 Current Price is $4.74 Difference: $0.86
If PFP meets the Bell Potter target it will return approximately 18% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 12.60 cents and EPS of 15.90 cents.
At the last closing share price the estimated dividend yield is 2.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.81.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 14.10 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 2.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.78.

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

PGC    PARAGON CARE LIMITED

Medical Equipment & Devices – Overnight Price: $0.40

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

Paragon Care's FY22 result appears to have pleased Bell Potter, revenue rising 5% including acquisitions but falling -7% ex-acquisitions due to lockdowns, which hit elective surgery numbers.

Earnings (EBITDA) grew by 21% to $30.2m in line with guidance, and the broker says the result helps re-establish management credibility on earnings guidance, acquisition integration and debt management.

The dividend reinvestment plan has been suspended, the interim and final dividend have been resumed and the payout target is now 40% to 60% of underlying NPAT. The broker raises FY23 and FY24 dividends accordingly.

EPS forecasts steady for FY23; rise 5% in FY24; and 6% for FY23. Buy rating retained. Target price rises to 48c from 44c.

This report was published on September 1, 2022.

Target price is $0.48 Current Price is $0.40 Difference: $0.08
If PGC meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 1.60 cents and EPS of 2.70 cents.
At the last closing share price the estimated dividend yield is 4.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.81.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 1.80 cents and EPS of 3.10 cents.
At the last closing share price the estimated dividend yield is 4.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.90.

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

RDT    RED DIRT METALS LIMITED

New Battery Elements – Overnight Price: $0.59

Bell Potter rates ((RDT)) as Initiation of coverage with Buy (1) –

Bell Potter initiates coverage on Red Dirt Metals with a Speculate Buy rating and 85c target price.

The company is exploring and evaluating its Mt Ida lithium project in WA (it also hosts narrow high-grade gold and copper mineralisation), with an eye to an accelerated development path.

High priority drilling began in July and the broker expects the company will announce an initial result in the 2022 December quarter. 

A pre-feasibility study is expected in the 2023 December half, followed by definitive feasibility study in late 2023/early 2024, with construction likely to start in the first half of 2024.

This report was published on August 24, 2022.

Target price is $0.85 Current Price is $0.59 Difference: $0.26
If RDT meets the Bell Potter target it will return approximately 44% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Bell Potter forecasts a full year FY22 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 42.14.

Forecast for FY23:

Bell Potter 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 59.00.

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

REG    REGIS HEALTHCARE LIMITED

Aged Care & Seniors – Overnight Price: $2.03

Moelis rates ((REG)) as Buy (1) –

FY22 results for Regis Healthcare showed adjusted earnings (EBITDA ) of $78m compared to $72m for the previous corresponding period, while net debt fell by -$39m following an inflow of refundable accommodation deposits (RAD) of around $83m.

The analyst assumes 92% average occupancy for FY23. Spot occupancy was 91.4% in August compared to 90.4% in February on easing omicron and flu impacts.

The higher average occupancy in FY23 and a funding uplift from October 2022 will offset inflation, suggests the broker. The target is set at $2.72. Buy.

This report was published on August 26, 2022.

Target price is $2.72 Current Price is $2.03 Difference: $0.69
If REG meets the Moelis target it will return approximately 34% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 6.80 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 3.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.42.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 6.60 cents and EPS of 6.60 cents.
At the last closing share price the estimated dividend yield is 3.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.76.

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

RHC    RAMSAY HEALTH CARE LIMITED

Healthcare services – Overnight Price: $70.75

Goldman Sachs rates ((RHC)) as No Rating (-1) –

Ramsay Health Care has rejected the KKR consortium's alternative structure in which the consortium would buy a 100% stake in Ramsay Health Care by way of a scheme of arrangement, independent of the Ramsay Sante request, at an average $84.93 a share.

Goldman Sachs is on research restriction.

This report was published on August 25, 2022.

Current Price is $70.75. Target price not assessed.
Current consensus price target is $79.36, suggesting upside of 12.2%(ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 213.6, implying annual growth of 83.6%.
Current consensus DPS estimate is 131.2, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 33.1.

Forecast for FY24:

Current consensus EPS estimate is 268.1, implying annual growth of 25.5%.
Current consensus DPS estimate is 158.8, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 26.4.

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

RRL    REGIS RESOURCES LIMITED

Gold & Silver – Overnight Price: $1.54

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

Regis Resources' FY22 result pleased the broker, despite proving a miss.

Revenue met Bell Potter's estimates but earnings (EBITDA) and net profit after tax sharply missed the broker's forecasts after non-cash inventory adjustments of -$78, which the broker describes as a distortion. Otherwise the company outpaced on both metrics.

Bell Potter suggests investors keep an eye on the cash flow, which provides a clearer view of performance, and this also outpaced. The broker also appreciates the reinstatement of the dividend and believes the combination of lower capital costs and higher production augurs well for FY23.

The broker expects further rises in free cash flow, now unimpeded after write-downs, not to mention the tax shield.

Buy rating retained. Target price rises to $2.70 from $2.64.

This report was published on August 25, 2022.

Target price is $2.70 Current Price is $1.54 Difference: $1.16
If RRL meets the Bell Potter target it will return approximately 75% (excluding dividends, fees and charges).
Current consensus price target is $1.77, suggesting upside of 15.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 4.00 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.2, implying annual growth of 625.3%.
Current consensus DPS estimate is 3.2, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 11.7.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 4.00 cents and EPS of 27.90 cents.
At the last closing share price the estimated dividend yield is 2.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.9, implying annual growth of -78.0%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 53.1.

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

SHA    SHAPE AUSTRALIA CORPORATION LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $1.79

Moelis rates ((SHA)) as Buy (1) –

Shape Australia's full year revenue and earnings were a slight miss to Moelis' forecasts, despite being up 15% and 28% year-on-year respectively. The broker notes underlying margins showed some improvement, and it expects this trend to persist into the new year.

Despite the company not providing quantitative guidance for the coming year, Moelis notes a record $395m order book and company commentary appear supportive of activity level and margin improvement.

The company is cautiously optimistic that the worst of the covid-related challenges are behind it. The Buy rating is retained and the target price decreases to $2.00 from $2.49.

This report was published on August 26, 2022.

Target price is $2.00 Current Price is $1.79 Difference: $0.21
If SHA meets the Moelis target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 6.70 cents and EPS of 8.00 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 22.38.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 13.70 cents and EPS of 16.50 cents.
At the last closing share price the estimated dividend yield is 7.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.85.

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

WHC    WHITEHAVEN COAL LIMITED

Coal – Overnight Price: $7.89

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

Whitehaven Coal's FY22 result met guidance and Bell Potter's estimates but the 40c dividend fell sharply short of the broker's forecast of 77c.

The broker does note $191m remains of the buyback and says management will seek approval for its extension at the next AGM. Along with cash flow, Bell Potter estimates net cash of $1.038bn will be sufficient to fund the buyback, tax payments, capital expenditure and the final dividend.

Management guides to a small increase in production and costs, and the broker expects the energy crisis will continue to support prices in FY23.

EPS forecasts rise 22% in FY23; are steady in FY24; and rise 5% in FY25. Buy rating retained. Target price rises to $7.65 from $5.75.

This report was published on August 25, 2022.

Target price is $7.65 Current Price is $7.89 Difference: minus $0.24 (current price is over target).
If WHC meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $8.59, suggesting upside of 8.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 151.00 cents and EPS of 258.30 cents.
At the last closing share price the estimated dividend yield is 19.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 302.5, implying annual growth of 53.1%.
Current consensus DPS estimate is 91.8, implying a prospective dividend yield of 11.6%.
Current consensus EPS estimate suggests the PER is 2.6.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 80.00 cents and EPS of 1143.00 cents.
At the last closing share price the estimated dividend yield is 10.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 0.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 152.5, implying annual growth of -49.6%.
Current consensus DPS estimate is 58.2, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 5.2.

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

---

Goldman Sachs rates ((WHC)) as Downgrade to Neutral from Buy (3) –

Whitehaven Coal's FY22 result outpaced Goldman Sachs's forecasts thanks to a strong earnings (EBITDA) beat derived from blending up lower quality coal.

This offset an EBITDA miss from the Narrabri underground mine. Free cash flow generation proved a miss, and the dividend and net cash were in line.

FY23 operating and cost guidance broadly met the broker, and production guidance for the bigger and stronger margin Maules and Narrabri mines outpaced. The latter helped justify the doubling in capital expenditure guidance.

EPS forecasts rise 8% in FY23; 7% in FY24; and 8% in FY25.

Rating downgraded to Neutral from Buy, in light of the recent share-price run, and given the broker expects the thermal coal price to fall within a year's time. Target price rises to $7.60 from $6.40.

This report was published on August 25, 2022.

Target price is $7.60 Current Price is $7.89 Difference: minus $0.29 (current price is over target).
If WHC 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 $8.59, suggesting upside of 8.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 103.00 cents and EPS of 254.00 cents.
At the last closing share price the estimated dividend yield is 13.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 302.5, implying annual growth of 53.1%.
Current consensus DPS estimate is 91.8, implying a prospective dividend yield of 11.6%.
Current consensus EPS estimate suggests the PER is 2.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 72.00 cents and EPS of 141.00 cents.
At the last closing share price the estimated dividend yield is 9.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 152.5, implying annual growth of -49.6%.
Current consensus DPS estimate is 58.2, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 5.2.

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

WOW    WOOLWORTHS GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $36.42

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

Woolworths Group's FY22 result met consensus and Goldman Sachs forecasts.

The broker considers it to be a high-quality result, characterised by strong pricing and positive mix, a trend the broker expects will continue into the December half.

Goldman Sachs downgrades FY23 net profit forecasts, expecting the company will cut prices in line with Coles Group ((COL)) to create a value proposition to customers, and given a weaker competitive performance in the first eight weeks of FY23.

EBIT margin forecasts rise as covid-induced losses unwind (albeit EBIT forecasts decline).

Woolworths Group is Goldman Sachs' preferred sector pick. Target price rises to $44.10 from $40.5. Buy rating retained.

This report was published on August 25, 2022.

Target price is $44.10 Current Price is $36.42 Difference: $7.68
If WOW meets the Goldman Sachs target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $36.24, suggesting downside of -0.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 107.00 cents and EPS of 142.00 cents.
At the last closing share price the estimated dividend yield is 2.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 136.6, implying annual growth of -79.0%.
Current consensus DPS estimate is 103.0, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 26.7.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 116.00 cents and EPS of 154.00 cents.
At the last closing share price the estimated dividend yield is 3.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 148.7, implying annual growth of 8.9%.
Current consensus DPS estimate is 110.8, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 24.5.

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