Australian Broker Call *Extra* Edition – Dec 19, 2022

This story features ARAFURA RARE EARTHS LIMITED, and other companies. For more info SHARE ANALYSIS: ARU

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)

ARU   AVG   BKW   COB   CU6 (2)   DXC   EDV   EGG   ELD (2)   EVN   GEM   IAG   IGO   NST   OZL   PLY   RDT   RGN   RIO   SBM   WOW (2)  

ARU    ARAFURA RARE EARTHS LIMITED

Rare Earth Minerals – Overnight Price: $0.53

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

Arafura Rare Earths' recent capital raising leaves it entering 2023 with $133m extra cash, with Hancock Prospecting as a cornerstone investor.

Bell Potter says the funds will be used to advance purchase long-lead items and start construction at Nolans.

The broker adjusts for the capital raising and brings forward $74m capital expenditure, and increases its forecast earnings loss for FY23 and FY24.

Speculative Buy rating retained. Target price rises to 70c from 64c.

This report was published on December 16, 2022.

Target price is $0.70 Current Price is $0.53 Difference: $0.175
If ARU meets the Bell Potter target it will return approximately 33% (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 1.88 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 27.93.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.51.

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

AVG    AUSTRALIAN VINTAGE LIMITED

Food, Beverages & Tobacco – Overnight Price: $0.62

Bell Potter rates ((AVG)) as Initiation of coverage with Hold (3) –

Bell Potter initiates coverage on Australian Vintage with a Hold rating and 65c target price.

The Australian wine company has, since 2015, been shifting from bulk wine to branded, observes the broker.

Despite the glut of global challenges, Bell Potter notes the company has outperformed the sector in Australia, NZ and the UK.

The broker says the company is an early mover in the "better for me" non-alcoholic market – the fastest growing market segments.

Bell Potter says Australian Vintage is trading at a 40% discount to net tangible assets but notes management expects higher FY23 energy and freight costs, which follows a disappointing 2022 grape crush (2023 could also be hit by weather) and a 20-year pricing low for bulk red wine.

This report was published on December 15, 2022.

Target price is $0.65 Current Price is $0.62 Difference: $0.03
If AVG meets the Bell Potter target it will return approximately 5% (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 2.90 cents and EPS of 3.40 cents.
At the last closing share price the estimated dividend yield is 4.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.24.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 2.90 cents and EPS of 5.10 cents.
At the last closing share price the estimated dividend yield is 4.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.16.

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

BKW    BRICKWORKS LIMITED

Building Products & Services – Overnight Price: $22.22

Jarden rates ((BKW)) as Neutral (3) –

Brickworks has sold its Oakdale East Stage 2 site into its Industrial Property Trust JV; and the company's record December-half property earnings (EBIT) guidance has sharply outpaced consensus forecasts.

Jarden observes that once fully developed, Oakdale East Stage 2 should add $1bn in gross asset value to the trust.

Neutral rating retained. Target price rises to $27.30 from $26.60.

This report was published on December 16, 2022.

Target price is $27.30 Current Price is $22.22 Difference: $5.08
If BKW meets the Jarden target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $26.36, suggesting upside of 16.7%(ex-dividends)
The company's fiscal year ends in July.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 64.90 cents and EPS of 254.60 cents.
At the last closing share price the estimated dividend yield is 2.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 254.6, implying annual growth of -54.8%.
Current consensus DPS estimate is 64.5, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 8.9.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 66.80 cents and EPS of 78.50 cents.
At the last closing share price the estimated dividend yield is 3.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 153.2, implying annual growth of -39.8%.
Current consensus DPS estimate is 66.4, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 14.7.

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

COB    COBALT BLUE HOLDINGS LIMITED

Industrial Metals – Overnight Price: $0.59

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

Cobalt Blue has completed production of pyrite concentrate at its demonstration plant in Broken Hill and Canaccord Genuity says the company will start refining and roasting leaching very soon, and expected the first mixed hydroxide product in December.

The broker suspects that some of the company's offtake agreements may have been delayed to 2023 and observes cobalt prices have eased, along with demand for magnets.

Buy rating retained. Target price eases to $1 from $1.10.

This report was published on December 15, 2022.

Target price is $1.00 Current Price is $0.59 Difference: $0.41
If COB meets the Canaccord Genuity target it will return approximately 69% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 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 29.50.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 3.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.67.

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

CU6    CLARITY PHARMACEUTICALS LIMITED

Medical Equipment & Devices – Overnight Price: $0.97

Bell Potter rates ((CU6)) as Buy (1) –

Clarity Pharmaceuticals' top-line figures from its Propeller trial for prostate cancer have met all primary and secondary endpoints and the company is aiming for approval under the Investigative New Drug application with the FDA.

Bell Potter notes important data relating to "sensitivity", crucial to the design of pivotal studies, was not discussed in the company's announcement.

Speculative Buy rating retained. Target rises to $1.35 from $1.00 to reflect the further derisking.

This report was published on December 15, 2022.

Target price is $1.35 Current Price is $0.97 Difference: $0.375
If CU6 meets the Bell Potter target it will return approximately 38% (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 14.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.77.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 18.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.19.

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

---

Wilsons rates ((CU6)) as Overweight (1) –

Clarity Pharmaceuticals says all Propeller Phase 1 diagnostic trials for prostate cancer have met primary and secondary endpoints, and Wilsons says this sharply derisks the company.

The company now proceeds to study design for Phase III pivotal trials in 2023 and Wilsons expects the trials will start in the December half and, all proceeding to plan, for market entry by the beginning of FY26.

Overweight rating and $1.22 target price retained.

This report was published on December 15, 2022.

Target price is $1.22 Current Price is $0.97 Difference: $0.245
If CU6 meets the Wilsons target it will return approximately 25% (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 9.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.85.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 11.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 8.86.

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

DXC    DEXUS CONVENIENCE RETAIL REIT

REITs – Overnight Price: $2.92

Moelis rates ((DXC)) as Buy (1) –

Dexus Convenience Retail REIT December-half valuations revealed a -1.5% fall in asset values as its weighted average credit grew to 5.91% from 5.74%.

Moelis appreciates the REIT's -29% trading discount to peers (-18% ungeared), expects a further increase in its cap-rate as interest rates rise, and believes asset sales could prove an upside catalyst given even a small divestment would be a big plus on the gearing front.

Buy rating retained. Target price falls to $3.94 from $4.03.

This report was published on December 16, 2022.

Target price is $3.94 Current Price is $2.92 Difference: $1.02
If DXC meets the Moelis target it will return approximately 35% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 22.20 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 7.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.27.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 22.90 cents and EPS of 22.50 cents.
At the last closing share price the estimated dividend yield is 7.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.98.

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

EDV    ENDEAVOUR GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $6.59

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

Woolworths Group ((WOW)) has sold off 98.5m Endeavour Group shares, at a total price of $63m, retaining a 9.1% stake in the company, and does not appear interested in further reducing its stake near-term according to media sources. 

Goldman Sachs expects this to put some short-term pressure on Endeavour's share price. Further, retail growth, particularly in the Dan Murphy's and BWS brands, may be muted as the company cycles strong comparables in the previous year.

The Buy rating and target price of $8.10 are retained.

This report was published on December 14, 2022.

Target price is $8.10 Current Price is $6.59 Difference: $1.51
If EDV meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $7.05, suggesting upside of 6.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 29.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.7, implying annual growth of 11.1%.
Current consensus DPS estimate is 22.2, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 21.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 EPS of 34.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.8, implying annual growth of 3.6%.
Current consensus DPS estimate is 23.3, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 20.8.

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

EGG    ENERO GROUP LIMITED

Media – Overnight Price: $2.80

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

Canaccord Genuity initiates coverage on marketing and communications (with a digital advertisiing focus) provider Enero Group with a Buy rating and $4.75 target price.

After a series of acquisitions and disposals, the broker believes the company is now focusing on its blue-chip clients through its core businesses OB Media and Hotwire.

The broker expects the company to take on more agencies and notes Enero is trading at a strong discount to international peers and expects it will post a three-year compound annual growth rate of 14% and boasts net cash of $50m.

This report was published on December 15, 2022.

Target price is $4.75 Current Price is $2.80 Difference: $1.95
If EGG meets the Canaccord Genuity target it will return approximately 70% (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 15.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 5.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.78.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 16.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 5.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.00.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $10.22

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

Elders metrics tracked by Bell Potter reveal weakness in cattle, sheep, wool and lamb markets, while slaughter and live export volumes increased.

Australian Bureau of Agricultural and Resource Economics also forecasts a lower FY23 summer crop acreage; fertiliser forward rates have weakened and ag-chem ingredients are also down.

EPS forecasts fall -1% in FY23 and -2% in FY and -3% in FY25.

Hold rating and $11 target price retained.

This report was published on December 16, 2022.

Target price is $11.00 Current Price is $10.22 Difference: $0.78
If ELD meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $12.37, suggesting upside of 20.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 50.00 cents and EPS of 78.70 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 88.6, implying annual growth of -14.9%.
Current consensus DPS estimate is 49.7, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 11.5.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 48.00 cents and EPS of 68.40 cents.
At the last closing share price the estimated dividend yield is 4.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 89.0, implying annual growth of 0.5%.
Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 11.5.

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

---

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

Elders has purchased an 11.3% stake in PGG Wrightson ((PGW.NZ)), a rural supplies and services business for a debt-funded NZ$37m.

Elders has indicated it is not interested in moving to a controlling stake at this stage, which would involved significant equity, says Wilsons.

Underweight rating and $8.22 target price retained.

This report was published on December 15, 2022.

Target price is $8.22 Current Price is $10.22 Difference: minus $2 (current price is over target).
If ELD meets the Wilsons target it will return approximately minus 20% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $12.37, suggesting upside of 20.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Current consensus EPS estimate is 88.6, implying annual growth of -14.9%.
Current consensus DPS estimate is 49.7, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 11.5.

Forecast for FY24:

Current consensus EPS estimate is 89.0, implying annual growth of 0.5%.
Current consensus DPS estimate is 46.8, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 11.5.

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

EVN    EVOLUTION MINING LIMITED

Gold & Silver – Overnight Price: $2.78

JP Morgan rates ((EVN)) as Downgrade to Underweight from Neutral (5) –

JP Morgan reviews the commodities sector after the strong run up in nickel and iron ore prices in November, accompanied by a smaller uptick in copper and aluminium.

The broker believes the China reopening is now priced in and the broker says evidence of such will need to appear soon given many stocks appear to be overbought and recession concerns could easily cause things to swing the other way.

The broker considers Evolution Mining to be vulnerable and downgrades to Underweight from Neutral. Target price edges up to $2.40 from $2.30.

This report was published on December 14, 2022.

Target price is $2.40 Current Price is $2.78 Difference: minus $0.38 (current price is over target).
If EVN meets the JP Morgan target it will return approximately minus 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $2.77, suggesting downside of -5.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 3.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 1.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.0, implying annual growth of -9.8%.
Current consensus DPS estimate is 2.9, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 18.3.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 11.00 cents and EPS of 32.00 cents.
At the last closing share price the estimated dividend yield is 3.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.7, implying annual growth of 29.4%.
Current consensus DPS estimate is 7.7, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 14.1.

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

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $1.07

Canaccord Genuity rates ((GEM)) as Upgrade to Buy from Hold (1) –

G8 Education's trading update sets it on track to effortlessly outpace 2022 consensus forecasts, and to meet Canaccord Genuity's forecasts, says the broker.

Occupancy, wage efficiency and cost-outs are all contributing to the story, and management points to higher enquiries and re-enrolments.

Add to that lower debt servicing and government funding, and the broker expects a sharp earnings uplift is in the wings.

Rating upgraded to Buy from Hold. Target price rises to $1.32 from $1.07.

This report was published on December 14, 2022.

Target price is $1.32 Current Price is $1.07 Difference: $0.25
If GEM meets the Canaccord Genuity target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 4.00 cents and EPS of 5.00 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 21.40.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 5.00 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 4.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.89.

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

IAG    INSURANCE AUSTRALIA GROUP LIMITED

Insurance – Overnight Price: $4.69

Jarden rates ((IAG)) as Buy (1) –

Jarden assesses the affects of a mooted sale of RACQ to Insurance Australia Group.

The broker says an acquisition would boost IAG's national presence by upping its Queensland exposure, and the broker considers a deal would be modestly EPS accretive, prior to synergies.

Jarden notes IAG could fund the acquisition through existing capital.

For now EPS forecasts are unchanged.

Buy rating and $5.40 target price retained.

This report was published on December 16, 2022.

Target price is $5.40 Current Price is $4.69 Difference: $0.71
If IAG meets the Jarden target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $5.17, suggesting upside of 11.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 23.00 cents and EPS of 30.20 cents.
At the last closing share price the estimated dividend yield is 4.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.5, implying annual growth of 123.6%.
Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 14.7.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 29.00 cents and EPS of 38.60 cents.
At the last closing share price the estimated dividend yield is 6.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.6, implying annual growth of 13.0%.
Current consensus DPS estimate is 29.2, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 13.0.

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

IGO    IGO LIMITED

Nickel – Overnight Price: $13.92

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

JP Morgan reviews the commodities sector after the strong run up in nickel and iron ore prices in November, accompanied by a smaller uptick in copper and aluminium.

The broker believes the China reopening is now priced in and the broker says evidence of such will need to appear soon given many stocks appear to be overbought and recession concerns could easily cause things to swing the other way.

The broker appreciates IGO's earnings growth and free cash flow yield, and spies further upside.

Overweight rating retained. Target price eases to $19.10 from $19.30.

This report was published on December 14, 2022.

Target price is $19.10 Current Price is $13.92 Difference: $5.18
If IGO meets the JP Morgan target it will return approximately 37% (excluding dividends, fees and charges).
Current consensus price target is $15.44, suggesting upside of 9.2%(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 254.00 cents.
At the last closing share price the estimated dividend yield is 3.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 206.4, implying annual growth of 372.3%.
Current consensus DPS estimate is 46.0, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 6.9.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 98.00 cents and EPS of 341.00 cents.
At the last closing share price the estimated dividend yield is 7.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 202.9, implying annual growth of -1.7%.
Current consensus DPS estimate is 101.5, implying a prospective dividend yield of 7.2%.
Current consensus EPS estimate suggests the PER is 7.0.

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

NST    NORTHERN STAR RESOURCES LIMITED

Gold & Silver – Overnight Price: $10.66

JP Morgan rates ((NST)) as Downgrade to Neutral from Overweight (3) –

JP Morgan reviews the commodities sector after the strong run up in nickel and iron ore prices in November, accompanied by a smaller uptick in copper and aluminium.

The broker believes the China reopening is now priced in and the broker says evidence of such will need to appear soon given many stocks appear to be overbought and recession concerns could easily cause things to swing the other way.

The broker appreciates Northern Star Resources's balance sheet and free cash flow yield, thanks to rising gold prices.

Rating downgraded to Neutral from Overweight on valuation. Target price steady at $11.

This report was published on December 14, 2022.

Target price is $11.00 Current Price is $10.66 Difference: $0.34
If NST meets the JP Morgan target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $10.82, suggesting downside of -3.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 27.00 cents and EPS of 33.00 cents.
At the last closing share price the estimated dividend yield is 2.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.9, implying annual growth of -21.8%.
Current consensus DPS estimate is 27.1, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 38.7.

Forecast for FY24:

JP Morgan forecasts a full year FY24 dividend of 36.00 cents and EPS of 57.00 cents.
At the last closing share price the estimated dividend yield is 3.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.5, implying annual growth of 54.0%.
Current consensus DPS estimate is 31.7, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 25.1.

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

OZL    OZ MINERALS LIMITED

Copper – Overnight Price: $27.25

JP Morgan rates ((OZL)) as Neutral (3) –

JP Morgan reviews the commodities sector after the strong run up in nickel and iron ore prices in November, accompanied by a smaller uptick in copper and aluminium.

The broker believes the China reopening is now priced in and the broker says evidence of such will need to appear soon given many stocks appear to be overbought and recession concerns could easily cause things to swing the other way.

Neutral rating retained. Target price rises to $28.25 from $27.50, which represents BHP Group's ((BHP)) current offer. EPS forecasts rise sharply.

This report was published on December 14, 2022.

Target price is $28.25 Current Price is $27.25 Difference: $1
If OZL meets the JP Morgan target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $27.57, suggesting upside of 0.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

JP Morgan forecasts a full year FY22 dividend of 11.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 0.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 56.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.4, implying annual growth of -58.4%.
Current consensus DPS estimate is 16.4, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 41.2.

Forecast for FY23:

JP Morgan forecasts a full year FY23 dividend of 14.00 cents and EPS of 71.00 cents.
At the last closing share price the estimated dividend yield is 0.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 84.2, implying annual growth of 26.8%.
Current consensus DPS estimate is 14.6, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 32.5.

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

PLY    PLAYSIDE STUDIOS LIMITED

Gaming – Overnight Price: $0.70

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

Playside Studios has signed a game licensing and publishing deal with Netflix relating to its Dumb Ways to Die intellectual property, starting January 23.

Shaw and Partners says the deal adds another high-profile gaming partner to Playside's relationship stable and should raise the profile of its upcoming Dumb Ways titles.

The broker believes the deal validates the company's ability, offers scope for expansion, and that milestone-based license fees should also underpin the broker's growth forecasts.

Buy rating retained and 90c target price retained.

This report was published on December 13, 2022.

Target price is $0.90 Current Price is $0.70 Difference: $0.195
If PLY meets the Shaw and Partners target it will return approximately 28% (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 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 117.50.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 235.00.

Market Sentiment: 1.0
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: $0.43

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

Red Dirt Metals has executed a non-binding memorandum of understanding for offtake and co-operation with VinES Energy Solutions, a young battery manufacturer parented by Vietnam's largest private conglomerate.

The company has also announced a $55m equity raising via institutional placement, and another $5m to retail shareholders to fund its Mt Ida and Yinnetharra lithium projects.

Under the placement, 120m new shares will be issues at 50c a share.

Bell Potter incorporates the raising into its valuation and believes the company is set for a strong 2023.

Speculative Buy rating retained. Target price eases to 85c from 90c.

This report was published on December 15, 2022.

Target price is $0.85 Current Price is $0.43 Difference: $0.415
If RDT meets the Bell Potter target it will return approximately 95% (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 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 48.33.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 54.38.

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

RGN    REGION GROUP

Overnight Price: $2.81

Moelis rates ((RGN)) as Downgrade to Hold from Buy (3) –

Region Group has appointed Evan Walsh as its new CFO and has announced its valuations for the December half.

Moelis observes the company's weighted average credit rating has increased 23 basis points to 5.67% from 5.44%, cutting valuations by -3%. Net tangible assets falls -4% to $2.69.

The broker reckons this may be the beginning of a medium-term trend of rising cap rates, which should be partly offset by rising income growth through inflation.

Rating downgraded to Hold from Buy to reflect the company's recent share price rally. Target price eases to $2.90 from $2.96.

This report was published on December 19, 2022.

Target price is $2.90 Current Price is $2.81 Difference: $0.09
If RGN meets the Moelis target it will return approximately 3% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 15.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.53.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 15.90 cents and EPS of 16.90 cents.
At the last closing share price the estimated dividend yield is 5.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.63.

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

RIO    RIO TINTO LIMITED

Bulks – Overnight Price: $114.67

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

Goldman Sachs reports that Rio Tinto's capital markets day focused on its growth projects, including the company's US$8bn decarbonisation and plans for the Pilbara turnaround – a plus in the broker's view.

The company's revised cost and capital expenditure guidance (down -US$1bn due to the stronger US dollar) broadly met the broker's expectations.

EPS forecasts fall -3% in 2023 and -1% in 2024 to reflect rising Pilbara and copper unit costs, and expected lower bauxite and alumina production.

Buy rating retained. Target price rises to $119.2 from $114.7 to reflect an improved operating environment.

This report was published on December 16, 2022.

Target price is $119.20 Current Price is $114.67 Difference: $4.53
If RIO meets the Goldman Sachs target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $109.29, suggesting downside of -4.6%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY22:

Goldman Sachs forecasts a full year FY22 dividend of 688.77 cents and EPS of 1133.59 cents.
At the last closing share price the estimated dividend yield is 6.01%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1260.6, implying annual growth of N/A.
Current consensus DPS estimate is 723.9, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 9.1.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 530.92 cents and EPS of 883.91 cents.
At the last closing share price the estimated dividend yield is 4.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1135.9, implying annual growth of -9.9%.
Current consensus DPS estimate is 742.2, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 10.1.

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

SBM    ST. BARBARA LIMITED

Gold & Silver – Overnight Price: $0.74

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

St. Barbara is undertaking M&A and consolidation within the Leonora area, reports Shaw and Partners.

Genesis Minerals ((GMD)) have announced an all-scrip-based merger through a reverse scheme of arrangement, and the new entity will be called Hoover House (HHL). The board has unanimously recommended the proposal.

Under the deal, Genesis will receive 2.0338 St. Barbara shares for each Genesis share.

Elsewhere, St Barbara is demerging from Atlantic, Simberi and other assets, which are to be held in a new soon-to-be-listed company: Pheonician Metals.

Genesis will raise $275m to fund the deal.

The broker says St. Barbara shareholders emerge the losers in this deal, particularly given the recent gold price break-out and given only 50% St. Barbara shareholder approval is required.

EPS forecasts slashed.

Buy rating and $1.80 target price retained.

This report was published on December 13, 2022.

Target price is $1.80 Current Price is $0.74 Difference: $1.06
If SBM meets the Shaw and Partners target it will return approximately 143% (excluding dividends, fees and charges).
Current consensus price target is $0.87, suggesting upside of 21.3%(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 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -4.0, implying annual growth of N/A.
Current consensus DPS estimate is 0.3, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY24:

Shaw and Partners forecasts a full year FY24 dividend of 2.00 cents and EPS of 10.80 cents.
At the last closing share price the estimated dividend yield is 2.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.1, implying annual growth of N/A.
Current consensus DPS estimate is 1.5, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is N/A.

Market Sentiment: 0.3
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: $34.31

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

Woolworths Group has bought a 55% stake in Petspiration Group, the second-largest player in Australia's domestic specialty pet sector, for $586m, believing it can improve margins through centralising supply chains and modernising the brand.

The deal is subject to competition approvals in Australian and New Zealand, and the company expects the deal to be finalised by mid 2023.

Goldman Sachs believes the purchase is consistent with the company's eco-system strategy – to move from liquor, retail and gaming and hotels, into higher growth, family retail markets.

Buy rating and $41.70 target price retained.

This report was published on December 16, 2022.

Target price is $41.70 Current Price is $34.31 Difference: $7.39
If WOW meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $33.74, suggesting downside of -2.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 102.00 cents and EPS of 135.00 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 25.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 130.4, implying annual growth of 3.0%.
Current consensus DPS estimate is 96.2, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 26.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 113.00 cents and EPS of 150.00 cents.
At the last closing share price the estimated dividend yield is 3.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 143.8, implying annual growth of 10.3%.
Current consensus DPS estimate is 106.4, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 24.1.

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

---

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

Woolworths Group has bought a 55% stake in Australia's second-largest specialty domestic pet company for $586m, to be funded by the company's recent $636m sale of Endeavour ((EDV)).

Jarden estimates the acquisiton will be 1% accretive, and is a good strategic fit, sitting as it does in the family retail market and given the benefits to be gained through supply chain optimisation, not to mention Woolworth's position as the No.2 pet insurer in Australia.

Meanwhile, Jarden is bullish on the grocery space and is keeping a keen eye to US supermarkets for signs of improved market growth.

Overweight rating and $35.50 target price retained.

This report was published on December 16, 2022.

Target price is $35.50 Current Price is $34.31 Difference: $1.19
If WOW meets the Jarden target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $33.74, suggesting downside of -2.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 113.00 cents and EPS of 138.90 cents.
At the last closing share price the estimated dividend yield is 3.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 130.4, implying annual growth of 3.0%.
Current consensus DPS estimate is 96.2, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 26.6.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 114.00 cents and EPS of 145.20 cents.
At the last closing share price the estimated dividend yield is 3.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 143.8, implying annual growth of 10.3%.
Current consensus DPS estimate is 106.4, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 24.1.

Market Sentiment: -0.1
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