Australian Broker Call *Extra* Edition – Sep 14, 2022

This story features CRONOS AUSTRALIA LIMITED, and other companies. For more info SHARE ANALYSIS: CAU

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)

CAU   DRE   DSK   GNC (2)   GSS   HLA   IGO   IMD   IMR   JIN   KED   MMI   NOL   NTO   PPS   PXA   SBM   SPK   SPL   TNT  

CAU    CRONOS AUSTRALIA LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.63

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

Bell Potter initiates coverage on Cronos Australia, the only profitable dividend paying medicinal cannabis company listed on the ASX. Described as a market leader in distribution to pharmacies, the company also provides patient consulting services.

Compared to competitors (Anspec, Health House), the company's CanView platform provides the widest range of medicinal cannabis products, according to the analyst.

An undemanding valuation, combined with strong expected revenue and earnings growth in FY23 deserves a Buy rating, in the analyst's view. A 12-month target price of $0.60 is set.

This report was published on September 5, 2022.

Target price is $0.60 Current Price is $0.63 Difference: minus $0.03 (current price is over target).
If CAU meets the Bell Potter target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 1.00 cents and EPS of 2.10 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.00.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 1.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.00.

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

DRE    DREADNOUGHT RESOURCES LIMITED

Mining – Overnight Price: $0.12

Canaccord Genuity rates ((DRE)) as Initiation of coverage with Speculative Buy (1) –

Canaccord Genuity initiates coverage of Dreadnought Resources with a Speculative Buy rating and a target of 24c.

Dreadnought is an Australian-based exploration company with primary asset the emerging Mangaroon Project which contains the 100%-owned Yin Rare Earth Element prospect, located in WA.

Next door is Hastings Technology Metals' ((HAS)) Yangibana REE project. In the broker's view, the success shown to date by Dreadnought and targets outlined would indicate it has potential to at least replicate the scale defined by Hastings.

The Mangaroon Project is also prospective for nickel, copper and platinum group metals, Canaccord points out.

This report was published on September 5, 2022.

Target price is $0.24 Current Price is $0.12 Difference: $0.12
If DRE meets the Canaccord Genuity target it will return approximately 100% (excluding dividends, fees and charges).

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

DSK    DUSK GROUP LIMITED

Household & Personal Products – Overnight Price: $2.00

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

Canaccord Genuity notes that while Dusk Group's FY22 sales and earnings were pre-guided, the FY22 outlook was particularly encouraging.

The company looks to have navigated a dramatic shift back to in-store purchasing by consumers, with a healthy increase in sales year on year.

Gross margins are trending in line with last year, inventory levels in decent shape, and Dusk plans to roll out five more stores ahead of Christmas.

While acknowledging Dusk was a lockdown beneficiary and has a negative earnings trajectory in the near term, the broker believes the stock offers value at current levels. Buy retained, target rises to $2.50 from $2.30.

This report was published on September 5, 2022.

Target price is $2.50 Current Price is $2.00 Difference: $0.5
If DSK meets the Canaccord Genuity target it will return approximately 25% (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 17.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 8.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.52.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 19.00 cents and EPS of 24.00 cents.
At the last closing share price the estimated dividend yield is 9.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.33.

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

GNC    GRAINCORP LIMITED

Agriculture – Overnight Price: $8.59

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

The east coast winter crop forecast by ABARES in September was up 9% compared to the June forecast. The 2022-23 summer crop forecast was also raised to 5.2mt from 4.4mt and compares to 5.5mt for the summer crop in 2021-22.

As harvest approaches, Bell Potter expects a reasonably strong trading outcome for GrainCorp if domestic grain discounts relative to other growing regions hold, after discounts widened further recently.

The Hold rating and $8.55 target are unchanged.

This report was published on September 7, 2022.

Target price is $8.55 Current Price is $8.59 Difference: minus $0.04 (current price is over target).
If GNC meets the Bell Potter target it will return approximately minus 0% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $9.71, suggesting upside of 13.1%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Bell Potter forecasts a full year FY22 dividend of 60.00 cents and EPS of 176.20 cents.
At the last closing share price the estimated dividend yield is 6.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 170.2, implying annual growth of 179.2%.
Current consensus DPS estimate is 85.9, implying a prospective dividend yield of 10.0%.
Current consensus EPS estimate suggests the PER is 5.0.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 44.00 cents and EPS of 101.40 cents.
At the last closing share price the estimated dividend yield is 5.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.9, implying annual growth of -39.5%.
Current consensus DPS estimate is 53.8, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 8.3.

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

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

Wilsons believes winter crop prospects for the east coast of Australia remain well above average, following generally favourable seasonal conditions over winter.

This view comes as ABARES released its September crop report showing a 13% increase for the total winter crop for 2022/23, after timely late winter rainfall.

The broker keeps its Market-weight rating and $8.29 target price.

This report was published on September 6, 2022.

Target price is $8.29 Current Price is $8.59 Difference: minus $0.3 (current price is over target).
If GNC meets the Wilsons target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $9.71, suggesting upside of 13.1%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY22:

Wilsons forecasts a full year FY22 dividend of 54.00 cents and EPS of 173.70 cents.
At the last closing share price the estimated dividend yield is 6.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 170.2, implying annual growth of 179.2%.
Current consensus DPS estimate is 85.9, implying a prospective dividend yield of 10.0%.
Current consensus EPS estimate suggests the PER is 5.0.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 44.00 cents and EPS of 84.70 cents.
At the last closing share price the estimated dividend yield is 5.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.9, implying annual growth of -39.5%.
Current consensus DPS estimate is 53.8, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 8.3.

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

GSS    GENETIC SIGNATURES LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.97

Bell Potter rates ((GSS)) as Speculative Hold (3) –

Ongoing momentum from covid testing resulted in a record FY22 performance by Genetic Signatures, though Bell Potter cautions sales from wider respiratory and enteric testing will be needed to sustain revenues in FY23.

The analyst notes FY22 European revenues were $3.8m compared to $4.4m in FY21, and no sales were made in the US after $1.6m in the prior year.

Last March, the company announced a three-year contract with Public Health Wales for up to $1.8m with an option for a two-year extension. However, the contract will not proceed as planned, announced management, and a resubmission will be required for the tender.

The Speculative Hold rating is maintained, while the target slips to $1.20 from $1.25

This report was published on September 5, 2022.

Target price is $1.20 Current Price is $0.97 Difference: $0.23
If GSS meets the Bell Potter target it will return approximately 24% (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 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.40.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.64.

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

HLA    HEALTHIA LIMITED

Healthcare services – Overnight Price: $1.55

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

Healthia revealed a revenue beat within FY22 results compared to the Shaw and Partners forecast, while earnings came in at the top end of management guidance.

FY23 underlying earnings (EBITDA) guidance was unchanged and in line with the analyst's forecast.

The broker expects a more normalised trading environment, especially into the 2H of FY23, and management alluded to a slight easing in the trend of staff absenteeism and patient appointment cancelations.

Shaw and Partners retains its Buy rating and lowers its target to $2.61 from $2.73.

This report was published on September 1, 2022.

Target price is $2.61 Current Price is $1.55 Difference: $1.06
If HLA meets the Shaw and Partners target it will return approximately 68% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 4.70 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 3.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.25.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 5.00 cents and EPS of 12.60 cents.
At the last closing share price the estimated dividend yield is 3.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.30.

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

IGO    IGO LIMITED

Nickel – Overnight Price: $14.95

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

JP Morgan raises its long-term lithium price forecasts. Despite lower total vehicle sales, the lithium demand forecast for 2030 is raised marginally due to a higher rate of battery electric vehicle (BEV) penetration.

IGO is one of  the broker's preferred picks within its coverage of the Lithium sector, and the target rises to $16.30 from $14.00. The company is seen as a one-stop shop for EV raw materials, with additional exposure to nickel, copper and cobalt. Overweight.

This report was published on September 5, 2022.

Target price is $16.30 Current Price is $14.95 Difference: $1.35
If IGO meets the JP Morgan target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $14.26, suggesting downside of -4.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 51.00 cents and EPS of 211.00 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 179.5, implying annual growth of 310.8%.
Current consensus DPS estimate is 31.5, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 8.3.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 66.00 cents and EPS of 238.00 cents.
At the last closing share price the estimated dividend yield is 4.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 157.6, implying annual growth of -12.2%.
Current consensus DPS estimate is 32.7, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 9.5.

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

IMD    IMDEX LIMITED

Mining Sector Contracting – Overnight Price: $2.18

Jarden rates ((IMD)) as Initiation of coverage with Buy (1) –

Compared to the past, Imdex now has greater relative exposure to mining production and Tier-1 mining companies, notes Jarden. In addition, revenue and earnings upside is expected from commercialising new technology.

The broker initiates coverage with a Buy rating and $2.42 target price. 

Revenue from Rental and SaaS has lifted to 59% of total revenue over the past five years, up from 44%, while revenue from Mining Production has increased to 20% from 10%.

These changes have increased the earnings (EBITDA) margin by circa 10 percentage points, points out the analyst. An R&D spend of around -7-9% of revenue is also leading to new technologies revenue.

This report was published on September 6, 2022.

Target price is $2.42 Current Price is $2.18 Difference: $0.24
If IMD meets the Jarden target it will return approximately 11% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 4.00 cents and EPS of 12.30 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.72.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 4.00 cents and EPS of 13.20 cents.
At the last closing share price the estimated dividend yield is 1.83%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.52.

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

IMR    IMRICOR MEDICAL SYSTEMS INC

Medical Equipment & Devices – Overnight Price: $0.28

Moelis rates ((IMR)) as Buy (1) –

Following in-line FY22 results, Moelis notes funding issues remain an overhang for Imricor Medical Systems shares.

After allowing for dilution from an assumed capital raise and lower EPS forecasts to reflect a slower roll out, the broker's target falls to $0.89 from $1.88.

No quantified FY23 guidance was offered though the business continues to "gain momentum", and "more procedures than ever in the
second half" are expected.

The analyst retains a Buy rating, owing to the high quality of the company's technology and the potential from a large market opportunity.

This report was published on September 5, 2022.

Target price is $0.89 Current Price is $0.28 Difference: $0.61
If IMR meets the Moelis target it will return approximately 218% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Moelis forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.64 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.79.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 13.68 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.05.

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

JIN    JUMBO INTERACTIVE LIMITED

Gaming – Overnight Price: $13.18

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

Jarden views the Jumbo Interactive business as a compounder, capable of delivering sustainable and long-term growth in the Australian Lottery retailing segment, with the ability to generate sufficient free cash for global acquisitions.

The broker also expects longer-term upside from the US iLottery market, and initiates coverage with an Overweight rating and $15.41 target price. The global lottery industry is considered very stable, with growth uninterrupted by economic events or recessions.

Negatives include a business model skewed toward jackpot products, over which the company has little control, explains the analyst. The company is also reliant upon a reseller agreement with Lottery Corp ((TLC)) that expires in 2030.

This report was published on September 6, 2022.

Target price is $15.41 Current Price is $13.18 Difference: $2.23
If JIN meets the Jarden target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $17.01, suggesting upside of 29.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 45.00 cents and EPS of 60.00 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.8, implying annual growth of 15.9%.
Current consensus DPS estimate is 44.3, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 22.8.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 48.00 cents and EPS of 62.60 cents.
At the last closing share price the estimated dividend yield is 3.64%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.2, implying annual growth of 14.5%.
Current consensus DPS estimate is 50.1, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 19.9.

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

KED    KEYPATH EDUCATION INTERNATIONAL INC

Education & Tuition – Overnight Price: $1.00

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

FY22 results for Keypath Education International were in line with Shaw and Partners expectations given key metrics had been pre-released.

Revenue increased 21% year-on-year and was 2% ahead of the prospectus forecast, while the contribution margin exceeded the prospectus estimate by 22%. The brokers likes management's ability to control direct costs and its focus on delivering the required margin.

Management reiterated adjusted earnings (EBITDA) will be profitable from the 2H of FY24. The Buy rating is maintained, while the target falls to $2.50 from $2.70 on modestly lower cash flow forecasts.

This report was published on September 1, 2022.

Target price is $2.50 Current Price is $1.00 Difference: $1.5
If KED meets the Shaw and Partners target it will return approximately 150% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 7.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.66.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 6.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.39.

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

MMI    METRO MINING LIMITED

Coal – Overnight Price: $0.02

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

Shaw and Partners incorporates Metro Mining's recent $25m capital raise at 2cps into forecasts, and allows for downgraded 2022 production guidance revealed at 1H results. Bad weather in June continued into July and guidance fell to 3.6-3.8Mt from 3.6-4.0Mt.

The broker notes the outlook for 2023 and 2024 remains excellent and believes share price weakness in reaction to the production guidance downgrade has created an entry point for investors.

The Buy rating is maintained and the target price falls to $0.06 from $0.07.

This report was published on September 1, 2022.

Target price is $0.06 Current Price is $0.02 Difference: $0.04
If MMI meets the Shaw and Partners target it will return approximately 200% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 2.22.

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

NOL    NOBLEOAK LIFE LIMITED

Insurance – Overnight Price: $1.74

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

Life insurance provider NobleOak Life delivered solid FY22 results, assesses Shaw and Partners, with underlying profit 5% ahead of the prospectus forecast and 4% ahead of the broker's estimate.

The price target rises to $2.80 from $2.75 and the Buy rating is maintained. Management expects to grow above market in FY23.

NobleOak Life benefits from rising interest rates (one of the few companies to do so) via higher returns on investment and lower values for outstanding claims liabilities, explains Shaw and Partners.

This report was published on September 1, 2022.

Target price is $2.80 Current Price is $1.74 Difference: $1.06
If NOL meets the Shaw and Partners target it will return approximately 61% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 13.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.99.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 15.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.37.

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

NTO    NITRO SOFTWARE LIMITED

IT & Support – Overnight Price: $1.68

Shaw and Partners rates ((NTO)) as Hold (3) –

Shaw and Partners agrees with the board of Nitro Software the $1.58/share takeover offer by Potentia/HarbourVest is opportunistic.

The broker's target price of $2.00 sits comfortably above the offer price, which in turn represented a 40% premium to the last closing share price. Comparable premiums for other recent pre-profit M&A have been around 70%, points out the analyst.

The board has rejected the offer.

This report was published on September 1, 2022.

Target price is $2.00 Current Price is $1.68 Difference: $0.32
If NTO meets the Shaw and Partners target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Shaw and Partners forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 15.22 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.04.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 11.45 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.67.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

PPS    PRAEMIUM LIMITED

Wealth Management & Investments – Overnight Price: $0.78

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

Despite earnings (EBITDA) for Praemium missing the forecasts of Shaw and Partners and consensus, the share price was bid up by 13% on the day of FY22 results.

The broker assesses a solid result from both Praemium separately managed accounts (SMA) and VMAAS products in an overall weaker 4Q. VMAAS is the company's non-custodial Portfolio Administration and Reporting Service.

The company is trading at a material discount to its peers, notes the analyst, and its strategic value would be very significant, especially for competitors Hub24 ((HUB)) or Netwealth Group ((NWL)).

This report was published on September 1, 2022.

Target price is $1.30 Current Price is $0.78 Difference: $0.52
If PPS meets the Shaw and Partners target it will return approximately 67% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 70.91.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.88.

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

PXA    PEXA GROUP LIMITED

Real Estate – Overnight Price: $15.40

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

Pexa Group's settlement activity continues to fall year on year, Jarden notes, though improved in July. While the housing market
continued to deteriorate in August, with national house prices falling and clearance rates remaining weak, settlement activity improved year on year.

Although market volumes are expected to fall by -18% in FY23 and Jarden's revenue estimate is -10% below consensus, the broker still sees risk to FY23 consensus earnings forecasts and reiterates an Underweight rating. Target unchanged at $12.85.

This report was published on September 1, 2022.

Target price is $12.85 Current Price is $15.40 Difference: minus $2.55 (current price is over target).
If PXA meets the Jarden target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 29.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.85.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 35.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.50.

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

SBM    ST. BARBARA LIMITED

Gold & Silver – Overnight Price: $0.94

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

Following in-line FY22 results for St. Barbara, Shaw and Partners notes management remains focused on permitting at the Atlantic operations (Canada) and the completion of the strategic review at the Simberi operations in Papua New Guinea.

In addition, the company will aim to continue the turnaround at Leonora (Western Australia), where Gwalia is the cornerstone of operations, and construction is beginning at the new Zoroastrian mine.

FY23 guidance was unchanged and the broker still expects grades will improve at Gwalia in the second and third quarters.

St. Barbara is one of the cheapest gold names under the coverage of Shaw and Partners, and the Buy rating and $1.80 target are unchanged.

This report was published on September 1, 2022.

Target price is $1.80 Current Price is $0.94 Difference: $0.86
If SBM meets the Shaw and Partners target it will return approximately 91% (excluding dividends, fees and charges).
Current consensus price target is $1.04, suggesting upside of 10.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 8.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.6, implying annual growth of N/A.
Current consensus DPS estimate is 0.8, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 156.7.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 18.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.4, implying annual growth of 133.3%.
Current consensus DPS estimate is 1.5, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 67.1.

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

SPK    SPARK NEW ZEALAND LIMITED

Telecommunication – Overnight Price: $4.82

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

Spark New Zealand produced a solid FY22 result, Jarden suggests, with FY23 guidance representing a solid step-up on FY22 and indicating the company continues to generate a 2.5-3.0% compound annual growth rate.

Spark's track record and compositional changes provide operating earnings confidence and the balance sheet also de-risks dividend, the broker notes. TowerCo opens up flexibility while operating earnings continue their modest growth path.

Jarden returns from restriction with an Overweight rating, lifting its target to NZ$5.26 from NZ$4.69.

This report was published on September 2, 2022.

Current Price is $4.82. Target price not assessed.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SPL    STARPHARMA HOLDINGS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.58

Bell Potter rates ((SPL)) as Re-Initiation of coverage with a Speculative Buy (1) –

Bell Potter re-initiates coverage of Starpharma with a Speculative Buy rating and $1.00 target price.

The company aims to commercialise the science of dendrimers, which are capable of ‘piggybacking’ a drug of interest through the body and delivering it to the targeted cells.

Starpharma has three revenue-generating over the counter products (non-pharmaceutical) approved for sale in a number of countries, though no approved pharmaceutical-grade dendrimer product has made it to market.

While around -$220m in accumulated losses have been incurred since 1996, notes the analyst, Astra Zeneca has signed a multiproduct licence with the company.

This licence is to develop and commercialise two novel Astra Zeneca oncology compounds, with potential to deliver Starpharma $124m in milestone payments, along with royalties.

This report was published on September 7, 2022.

Target price is $1.00 Current Price is $0.58 Difference: $0.42
If SPL meets the Bell Potter target it will return approximately 72% (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 0.00 cents and EPS of minus 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 23.20.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 14.87.

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

TNT    TESSERENT LIMITED

IT & Support – Overnight Price: $0.11

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

FY22 operating earnings (EBITDA) for Tesserent were broadly in line with the estimate by Shaw and Partners.

Regarding the integration of acquisitions, management noted the Rivium business (enterprise security) almost tripled FY20 turnover levels, and earnings for the Airloom business (managed services) were 60% higher compared to September 2020.

While no FY23 guidance was provided, the broker points out organic growth and margins remain strong. 

Shaw and Partners' Buy rating is maintained, while the target price eases to $0.22 from $0.25 on -2-3% lower earnings across the forecast period.

This report was published on September 1, 2022.

Target price is $0.22 Current Price is $0.11 Difference: $0.11
If TNT meets the Shaw and Partners target it will return approximately 100% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.75.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.22.

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

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