Australian Broker Call *Extra* Edition – Mar 16, 2023

This story features PENTANET LIMITED, and other companies. For more info SHARE ANALYSIS: 5GG

An additional news report on the recommendation, valuation, forecast and opinion changes and updates 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)

5GG   APE   CAR (2)   CTP   DDR   DRO   GL1   GNC   HAS   INR   MAQ   ORI   PWH   RGN   SGM   VUL  

5GG    PENTANET LIMITED

Telecommunication – Overnight Price: $0.12

Bell Potter rates ((5GG)) as Speculative Buy (1) –

Pentanet has entered into an memorandum of understanding with its network equipment supplier to provide hardware for its 5G network expansion on a fixed monthly subscription payment plan in lieu of higher upfront capex.

The agreement provides Pentanet with a flexible way to deploy 5G network infrastructure, Bell Potter notes, as well as a variable
financing facility.

With the Westpac facility ear-marked for cloud gaming infrastructure, having further financing and options available for its 5G rollout is
an important step in financing the bridge between its network rollout and on-boarding high value on-net subscribers, the broker suggests.

Target rises to 30c from 26c, Speculative Buy retained.

This report was published on March 8, 2023.

Target price is $0.30 Current Price is $0.12 Difference: $0.18
If 5GG meets the Bell Potter target it will return approximately 150% (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 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.53.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 1.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.32.

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: $13.34

Bell Potter rates ((APE)) as Downgrade to Hold from Buy (3) –

Bell Potter has reviewed its Eagers Automotive forecasts post the release of the 2022 result and made upgrades to underlying operating profit forecasts, which are solely driven by increases in margin forecasts.

The broker notes new margin forecasts are still below the 2022 record, and thus assumes some gradual decline as supply constraints ease. Bell Potter does assume however that margins remain above the pre Automotive Holdings merger and covid average, and historical ten year average.

Target rises to $15.25 from $15.00. Rating downgraded to Hold from Buy on valuation.

This report was published on March 8, 2023.

Target price is $15.25 Current Price is $13.34 Difference: $1.91
If APE meets the Bell Potter target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $14.59, suggesting upside of 10.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 71.00 cents and EPS of 116.00 cents.
At the last closing share price the estimated dividend yield is 5.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 113.9, implying annual growth of -6.1%.
Current consensus DPS estimate is 69.3, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 11.6.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 71.00 cents and EPS of 106.00 cents.
At the last closing share price the estimated dividend yield is 5.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.7, implying annual growth of -9.8%.
Current consensus DPS estimate is 65.9, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 12.9.

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

CAR    CARSALES.COM LIMITED

Automobiles & Components – Overnight Price: $21.91

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

Carsales has announced the proposed acquisition of an additional 40% stake in Brazil's Webmotors to lift its stake to 70%. A corresponding $500m equity raising leaves excess funds to be used to strengthen the balance sheet.

Webmotors has a range of levers to sustain its strong earnings growth, Goldman Sachs suggests, and revenue momentum is expected to drive operating leverage, with Carsales noting a significant opportunity to close the margin differential between Webmotors (40%) and Carsales' other businesses (50% to 64%).

Neutral and $23 target retained.

This report was published on March 9, 2023.

Target price is $23.00 Current Price is $21.91 Difference: $1.09
If CAR meets the Goldman Sachs target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $25.12, suggesting upside of 16.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 64.00 cents and EPS of 164.00 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 13.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.5, implying annual growth of 33.7%.
Current consensus DPS estimate is 59.6, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 28.7.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 69.00 cents and EPS of 86.00 cents.
At the last closing share price the estimated dividend yield is 3.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.3, implying annual growth of 14.3%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 3.0%.
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

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

Carsales is set to increase its stake in Webmotors to 70%, announcing it will acquire an additional 40% interest in the Brazilian digital automotive marketplace. The stake comes at a cost of -$353m to be funded via a $500m equity raise.

Jarden was unsurprised by the announcement, given Carsales has previous demonstrated interest in buying out its international majorities.

The company further demonstrated smooth integration of its Trader International acquisition in the first half, showing ability to quickly deliver on pricing benefits, new products and market share gains. 

The Underweight rating is retained and the target price increases to $21.00 from $20.90.

This report was published on March 9, 2023.

Target price is $21.00 Current Price is $21.91 Difference: minus $0.91 (current price is over target).
If CAR meets the Jarden target it will return approximately minus 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $25.12, suggesting upside of 16.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 54.80 cents and EPS of 71.60 cents.
At the last closing share price the estimated dividend yield is 2.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.60.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.5, implying annual growth of 33.7%.
Current consensus DPS estimate is 59.6, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 28.7.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 63.90 cents and EPS of 70.90 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 30.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.3, implying annual growth of 14.3%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 3.0%.
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

CTP    CENTRAL PETROLEUM LIMITED

NatGas – Overnight Price: $0.06

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

While Central Petroleum reported a year-on-year underlying earnings decline of -47% to $5.3m in the first half, Bell Potter points out the result was reflective of the company's sell down of its 50% Amadeus Basin interest and a sales impact from an unplanned outage at the Northern Gas Pipeline. 

The broker anticipates stronger revenue over the second half, supported by the reopening of the Northern Gas Pipeline. It also points out Central Petroleum is considering a funded program of six well recompletions and two new well developments at Mereenie for the first half of FY24, which could drive production growth. 

The Hold rating is retained and the target price decreases to 7.5 cents from 8.5 cents. 

This report was published on March 7, 2023.

Target price is $0.08 Current Price is $0.06 Difference: $0.012
If CTP meets the Bell Potter target it will return approximately 19% (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 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.73.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.30 cents.
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

DDR    DICKER DATA LIMITED

Hardware & Equipment – Overnight Price: $8.30

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

Commentary following Dicker Data's FY22 result was positive on the demand environment and order book so far in FY23, although Goldman Sachs continues to see risk that the cyclically exposed parts of the company’s portfolio (PCs/consumer) soften through 2023.

Consumer electronics sales data are rolling over, possibly a portent to a slowdown in Dicker Data ’s SME business (75% of sales) while also posing a risk of competitor discounting to reduce channel inventory, the broker notes.

Offsetting softer FY23 Hardware sales is strength in Software, as the company continues to win vendor contracts and the broker sees the company benefiting from the defensive, structural growth of cloud software.

Target falls to $10.00 from $11.35, Neutral retained.

This report was published on March 8, 2023.

Target price is $10.00 Current Price is $8.30 Difference: $1.7
If DDR meets the Goldman Sachs target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 44.00 cents and EPS of 45.00 cents.
At the last closing share price the estimated dividend yield is 5.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.44.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 49.00 cents and EPS of 51.00 cents.
At the last closing share price the estimated dividend yield is 5.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.27.

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

DRO    DRONESHIELD LIMITED

Hardware & Equipment – Overnight Price: $0.30

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

DroneShield has revealed it received applications for its share purchase program which greatly exceeded the previously announced target and the company confirmed it will accept 100% of applications with no scale-back.

It is positive to see the high level of demand for the stock from existing shareholders, Goldman Sachs suggests, anticipating a significant proportion of these funds will be utilised to accelerate an immediate build-up of inventory, as well scaling of specific areas of the business and general working capital.

In the broker's view, the possible near-term catalysts that may be driving the significant buildup of inventory include an initial contract for the counter-drone roll out across US military bases or some level of involvement in the Biden Administration military aid package to Ukraine.

Target dips to 40c from 41c, Buy retained.

This report was published on March 8, 2023.

Target price is $0.40 Current Price is $0.30 Difference: $0.095
If DRO meets the Bell Potter target it will return approximately 31% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.63.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.81.

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

GL1    GLOBAL LITHIUM RESOURCES LIMITED

New Battery Elements – Overnight Price: $1.37

Canaccord Genuity rates ((GL1)) as Speculative Buy (1) –

Global Lithium Resources' scoping study has delivered a larger resource than expected and hence a larger processing plant is envisaged, which will come with a higher capital cost, Canaccord Genuity notes.

Updating estimates for the Manna project leads to a cut in target to $2.70 from $3.00 due to lower head grade, higher operating costs and earlier capex spend.

Speculative Buy retained on valuation.

This report was published on March 7, 2023.

Target price is $2.70 Current Price is $1.37 Difference: $1.33
If GL1 meets the Canaccord Genuity target it will return approximately 97% (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 9.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 15.22.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 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 27.40.

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

GNC    GRAINCORP LIMITED

Agriculture – Overnight Price: $7.29

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

Below average crop outcomes could be ahead, says Bell Potter, typically leaving lower exportable surplus for producers like GrainCorp. Risk of an El Nino weather pattern emerging are rising, and the broker points out there is a 60-80% chance of below median rainfall over the next three months, and a 60-80% chance of above median temperatures. 

The broker expects GrainCorp would deliver a below average crop outcome in an El Nino year, with the weather pattern typically driving winter cropping acreage down -9% year-on-year. It points out GrainCorp would be one the most impacted stocks by El Nino weather. 

The Hold rating and target price of $8.00 are retained.

This report was published on March 7, 2023.

Target price is $8.00 Current Price is $7.29 Difference: $0.71
If GNC meets the Bell Potter target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $8.80, suggesting upside of 23.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Bell Potter forecasts a full year FY23 dividend of 34.00 cents and EPS of 96.10 cents.
At the last closing share price the estimated dividend yield is 4.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.2, implying annual growth of -43.8%.
Current consensus DPS estimate is 43.2, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 7.5.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 22.00 cents and EPS of 54.10 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.6, implying annual growth of -43.1%.
Current consensus DPS estimate is 30.3, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 13.2.

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

HAS    HASTINGS TECHNOLOGY METALS LIMITED

Rare Earth Minerals – Overnight Price: $2.52

Canaccord Genuity rates ((HAS)) as Speculative Buy (1) –

Following the appointment of new key personnel, including a new CEO, Hastings Technology Metals has commenced a project cost and schedule review at its Yangibana rare earths project, to be completed in coming months.

Noting industry inflation pressures, Canaccord Genuity anticipates an increase to project capex, with no new guidance at this stage.

Target falls to $4.50 from $7.60, including an increased risk discount due to cost uncertainty, but Speculative Buy retained as Yangibana is one of the world's most advanced rare earth projects and the broker has a positive rare earth long term view.

This report was published on March 6, 2023.

Target price is $4.50 Current Price is $2.52 Difference: $1.98
If HAS meets the Canaccord Genuity target it will return approximately 79% (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 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 31.50.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 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 252.00.

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

INR    IONEER LIMITED

New Battery Elements – Overnight Price: $0.30

Canaccord Genuity rates ((INR)) as Hold (3) –

Ioneer has passed US bureaucratic milestones and received conditional commitment for a government loan of US$700m for its Rhyolite Ridge lithium-boron project. Canaccord Genuity assumes capital costs have since risen from prior guidance.

The debt terms open questions on model inputs, the broker suggests. The next major focus point will be in early 2024 when a decision is due under environmental laws.

Target falls to 40c from 75c (70% risk-weighting), Hold retained.

This report was published on March 6, 2023.

Target price is $0.40 Current Price is $0.30 Difference: $0.1
If INR meets the Canaccord Genuity target it will return approximately 33% (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 minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 30.00.

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

MAQ    MACQUARIE TELECOM GROUP LIMITED

Telecommunication – Overnight Price: $59.00

Goldman Sachs rates ((MAQ)) as Upgrade to Buy from Neutral (1) –

The key highlight of Macquarie Telecom’s first half result, Goldman Sachs notes, was the continued strength in its Cloud Services & Government segment, with 19% year on year revenue growth at a solid high-20’s earnings margin (%).

Macquarie Telecom’s extended and upsized tax department cybersecurity contract demonstrates the market leading position that the company occupies as a top-tier Certified Strategic government cloud provider, the broker suggests, based out of its own data centres in Canberra.

Strong cybersecurity IT spending, as well as the structural growth of multi-cloud services, positions Macquarie Telecom’s business to deliver sustainable mid-teens revenue growth across FY23-25, Goldman Sachs believes.

Target rises to $73.30 from $65.20. Upgrade to Buy from Neutral.

This report was published on March 6, 2023.

Target price is $73.30 Current Price is $59.00 Difference: $14.3
If MAQ meets the Goldman Sachs target it will return approximately 24% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 0.00 cents and EPS of 81.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 72.84.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 119.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.58.

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

ORI    ORICA LIMITED

Mining Sector Contracting – Overnight Price: $15.31

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

Jarden sees limited growth upside for Orica in the current fiscal year given lower recontracting in Australia and Asia Pacific. However, the broker does model a 118,000 tonne domestic supply shortfall over the year, likely keeping the domestic pricing environment strong for Orica. 

The broker has accounted for lower than expected recontracting in forecasts, and does remain 3.9% ahead of consensus. 

The Overweight rating is retained and the target price decreases to $16.70 from $16.85.

This report was published on March 9, 2023.

Target price is $16.70 Current Price is $15.31 Difference: $1.39
If ORI meets the Jarden target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $16.18, suggesting upside of 5.8%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 40.50 cents and EPS of 80.60 cents.
At the last closing share price the estimated dividend yield is 2.65%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 78.5, implying annual growth of 111.7%.
Current consensus DPS estimate is 41.2, implying a prospective dividend yield of 2.7%.
Current consensus EPS estimate suggests the PER is 19.5.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 46.40 cents and EPS of 92.10 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 16.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 92.2, implying annual growth of 17.5%.
Current consensus DPS estimate is 46.5, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 16.6.

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

PWH    PWR HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $9.76

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

Following the release of PWR Holdings' first half results, Bell Potter has lifted its revenue forecasts 2% and 4% for FY24 and FY25 respectively, and reduced its net profit forecasts for the same years.

Additionally, increased investment in the UK, alongside other investment costs, saw capital expenditure forecasts increase to -$11.2m, -$10.0m and -$15.0m for FY23, FY24 and FY25.

The broker considers PWR Holdings fairly valued, noting given the company's strong pipeline potential large contracts could be announced in coming months and serve as a catalyst for share price upside. 

The Hold rating is retained and the target price decreases to $10.75 from $11.00.

This report was published on March 7, 2023.

Target price is $10.75 Current Price is $9.76 Difference: $0.99
If PWH meets the Bell Potter target it will return approximately 10% (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 13.00 cents and EPS of 22.60 cents.
At the last closing share price the estimated dividend yield is 1.33%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 43.19.

Forecast for FY24:

Bell Potter forecasts a full year FY24 dividend of 15.50 cents and EPS of 27.50 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 35.49.

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

RGN    REGION GROUP

REITs – Overnight Price: $2.44

Moelis rates ((RGN)) as Upgrade to Buy from Hold (1) –

Region Group's earnings profile has been muted near-term, Moelis notes, given rising rates, limited funds under management growth within the GIC mandate, and a modest balance sheet.

The broker suggests excess balance sheet capacity may make the eventual resurgence of direct market liquidity something of a catalyst for earnings.

Region's share price has fallen -10% since reporting results a month ago versus -6% for the ASX300 REITs, and has now entered value territory in the broker's view. Upgrade to Buy from Hold. Target unchanged at $2.85.

This report was published on March 7, 2023.

Target price is $2.85 Current Price is $2.44 Difference: $0.41
If RGN meets the Moelis target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $2.77, suggesting upside of 12.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 15.20 cents and EPS of 16.90 cents.
At the last closing share price the estimated dividend yield is 6.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of -62.7%.
Current consensus DPS estimate is 15.1, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 15.0.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 14.60 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 5.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.4, implying annual growth of N/A.
Current consensus DPS estimate is 15.2, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 15.0.

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

SGM    SIMS LIMITED

Steel & Scrap – Overnight Price: $15.03

Jarden rates ((SGM)) as Neutral (3) –

Sims has commenced a divestment process for its 50% stake in renewable energy generator LMS Energy. There is significant ongoing capital expenditure from biogas to energy projects, which Jarden believes may not be considered core investment for Sims.

The broker assumes the company would prioritise the use of funds for potential acquisitions ahead of capital management initiatives, with  the earliest possible timing for completion of a sale in the first half FY24.

The gradual resumption of production at EU steel mills in coming months would help volume and pricing for scrap metal, Jarden suggests.

Target rises to $16.60 from $16.40, Neutral retained.

This report was published on March 7, 2023.

Target price is $16.60 Current Price is $15.03 Difference: $1.57
If SGM meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $14.84, suggesting upside of 0.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 28.70 cents and EPS of 75.90 cents.
At the last closing share price the estimated dividend yield is 1.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.2, implying annual growth of -75.2%.
Current consensus DPS estimate is 32.3, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 19.6.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 26.40 cents and EPS of 88.10 cents.
At the last closing share price the estimated dividend yield is 1.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 95.5, implying annual growth of 27.0%.
Current consensus DPS estimate is 31.3, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 15.4.

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

VUL    VULCAN ENERGY RESOURCES LIMITED

New Battery Elements – Overnight Price: $6.09

Canaccord Genuity rates ((VUL)) as Speculative Buy (1) –

Vulcan Energy Resources has released its definitive feasibility study for phase one of the Zero Carbon Lithium Project. While production expectations have increased, so has the capital requirement due to it being a larger project.

Taking into account a pushed back timeline for first cashflow, higher costs and a decline in lithium grade over the project life, Canaccord Genuity has cut its target to $15 from $19. Speculative Buy retained.

This report was published on March 16, 2023.

Target price is $15.00 Current Price is $6.09 Difference: $8.91
If VUL meets the Canaccord Genuity target it will return approximately 146% (excluding dividends, fees and charges).

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

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