Australian Broker Call *Extra* Edition – May 23, 2023

This story features LIFE360 INC, and other companies. For more info SHARE ANALYSIS: 360

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)

360   ALL   ALQ   APX   AUB   DDH   ELD   IMM   IPL   JHX (2)   NVA   PBH   PME (2)   PWR   SUL (2)   TPW   UMG   WEB   XRO  

360    LIFE360 INC

Software & Services – Overnight Price: $6.87

Goldman Sachs rates ((360)) as Buy (1) –

Life360 posted a strong first quarter result with net additions in US paying circles increasing 38,000.

Goldman Sachs points out the first quarter is typically the softest for the company and, therefore, it appears to be executing strongly on price increases while growing subscriber volumes and spending less on user acquisition.

A profitability inflection point continues to be flagged by the broker and the valuation is deemed compelling. Buy rating maintained. Target rises to $8.35 from $7.85.

This report was published on May 16, 2023.

Target price is $8.35 Current Price is $6.87 Difference: $1.48
If 360 meets the Goldman Sachs target it will return approximately 22% (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 0.00 cents and EPS of 0.00 cents.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 13.29 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.69.

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

ALL    ARISTOCRAT LEISURE LIMITED

Gaming – Overnight Price: $38.75

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

Aristocrat Leisure's 1H results were in line with forecasts by Goldman Sachs and offer incremental support to the broker's Buy thesis.

The analyst highlights there were no major concerns around either consumer spending momentum or investment appetite from casinos.

Land-based provided the key positive surprise for Goldman Sachs with strong growth in sales and the installed base, and the update from Anaxi was also pleasing. However, Pixel United underperformed against consensus expectations. 

The broker raises its target by 2.2% to $46.70.

This report was published on May 19, 2023.

Target price is $46.70 Current Price is $38.75 Difference: $7.95
If ALL meets the Goldman Sachs target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $44.00, suggesting upside of 13.5%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 62.00 cents and EPS of 207.00 cents.
At the last closing share price the estimated dividend yield is 1.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 194.2, implying annual growth of 35.9%.
Current consensus DPS estimate is 63.7, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 20.0.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 65.00 cents and EPS of 222.00 cents.
At the last closing share price the estimated dividend yield is 1.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 208.0, implying annual growth of 7.1%.
Current consensus DPS estimate is 73.0, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 18.6.

Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ALQ    ALS LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $12.35

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

Ahead of the FY23 results on May 29, ALS Ltd has issued upgraded net profit guidance of $312-322m.

Jarden expects the main focus in the results will be the outlook for commodities in FY24 and whether pricing momentum can be maintained as well as whether Nuvisan's drag on life sciences will moderate.

The broker forecasts a considerable slowdown in sampling flow volumes for the commodities business in the second half. Overweight rating and $12.55 target maintained.

This report was published on May 16, 2023.

Target price is $12.55 Current Price is $12.35 Difference: $0.2
If ALQ meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $12.18, suggesting downside of -1.4%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 38.50 cents and EPS of 65.20 cents.
At the last closing share price the estimated dividend yield is 3.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.3, implying annual growth of 65.4%.
Current consensus DPS estimate is 37.3, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 18.9.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 40.60 cents and EPS of 67.70 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 18.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 67.4, implying annual growth of 3.2%.
Current consensus DPS estimate is 40.0, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 18.3.

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

APX    APPEN LIMITED

IT & Support – Overnight Price: $2.34

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

Appen intends to raise $60m to support a "return to profitability". Wilsons expects the business will now end FY23 with $39.3m in cash. Moreover, the raising should go some way to alleviating short-term concerns around the balance sheet.

Still, Wilsons believes there is considerable work ahead for the business as it rebuilds its executive team and executes on a refreshed strategy. Underweight maintained. Target is reduced to $1.77 from $1.90.

This report was published on May 17, 2023.

Target price is $1.77 Current Price is $2.34 Difference: minus $0.57 (current price is over target).
If APX meets the Wilsons target it will return approximately minus 24% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $1.89, suggesting downside of -19.3%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 32.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 7.29.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -30.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 13.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -11.9, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

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

AUB    AUB GROUP LIMITED

Insurance – Overnight Price: $26.44

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

AUB Group has decided not to proceed with the previously announced joint venture of Tysers UK Retail with PSC Insurance ((PSI)) and will retain 100% of Tysers.

Management noted increased earnings will be offset by lower investment income from no longer receiving around $100m via the PSC JV.

Separately, management raised guidance for FY23 by around 4%, which Goldman Sachs attributes to a greater profit contribution from acquisitions and a better organic performance across all divisions including nine months of Tysers profit from October 1, 2022.

The company is also aiming to raise $165m to reduce debt and gain financial flexibility via an institutional placement of $150m, and up to $15m from a share purchase plan. 

The broker retains its $28.76 target and Buy rating.

This report was published on May 19, 2023.

Target price is $28.76 Current Price is $26.44 Difference: $2.32
If AUB meets the Goldman Sachs target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $29.50, suggesting upside of 11.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 73.00 cents and EPS of 122.00 cents.
At the last closing share price the estimated dividend yield is 2.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 123.5, implying annual growth of 17.0%.
Current consensus DPS estimate is 63.3, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 21.4.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 90.00 cents and EPS of 146.00 cents.
At the last closing share price the estimated dividend yield is 3.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 142.1, implying annual growth of 15.1%.
Current consensus DPS estimate is 76.8, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 18.6.

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

DDH    DDH1 LIMITED

Mining Sector Contracting – Overnight Price: $0.83

Moelis rates ((DDH)) as Buy (1) –

Moelis continues to believe DDH1 is well-positioned to take advantage of any uptick in sentiment.

Tighter equity capital markets and fewer raisings among juniors has meant a "cash conservation mentality" while the majors have also moderated their exploration activity, the broker observes.

Yet the company has leading operating scale and capabilities and can rapidly exploit deferred exploration as sentiment improves. Buy rating maintained. Target is reduced to $1.23 from $1.35.

This report was published on May 16, 2023.

Target price is $1.23 Current Price is $0.83 Difference: $0.395
If DDH meets the Moelis target it will return approximately 47% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 5.60 cents and EPS of 12.70 cents.
At the last closing share price the estimated dividend yield is 6.71%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.57.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 5.40 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 6.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.23.

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

ELD    ELDERS LIMITED

Agriculture – Overnight Price: $6.91

Moelis rates ((ELD)) as Buy (1) –

Moelis found the first half result mixed as the unwinding of record high commodity and livestock prices began to impact on gross profit.

Agricultural chemicals' gross profit was higher than anticipated, up 2.1%, while fertiliser was down -23.5% and wholesale products down -13.5%.

The broker is positive about Elders over the medium term, but notes headwinds to earnings are looming as the business cycles a period of exceptionally strong demand.

Target is lowered to $8.39 from $9.68 and a Buy rating is maintained.

This report was published on May 15, 2023.

Target price is $8.39 Current Price is $6.91 Difference: $1.48
If ELD meets the Moelis target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $8.86, suggesting upside of 28.3%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 39.90 cents and EPS of 69.10 cents.
At the last closing share price the estimated dividend yield is 5.77%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 72.6, implying annual growth of -30.2%.
Current consensus DPS estimate is 47.1, implying a prospective dividend yield of 6.8%.
Current consensus EPS estimate suggests the PER is 9.5.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 25.80 cents and EPS of 64.40 cents.
At the last closing share price the estimated dividend yield is 3.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.73.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 68.2, implying annual growth of -6.1%.
Current consensus DPS estimate is 43.1, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 10.1.

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

IMM    IMMUTEP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.34

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

Wilsons believes the confirmed overall survival (OS) benefit from the phase II trial in 1L non-small-cell lung cancer, announced by Immutep, will place the Efti and Keytruda combination at the forefront of clinician's minds.

This view is subject to confirmation by randomised trials, cautions the analyst.

The OS data suggests clinicians many no longer need to weigh up incremental survival benefit with add-on chemotherapy, as the Efti combination is able to deliver on OS with a superior tolerability profile.

Overweight rating and target price of $0.91 are retained.

This report was published on May 18, 2023.

Target price is $0.91 Current Price is $0.34 Difference: $0.575
If IMM meets the Wilsons target it will return approximately 172% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 5.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.78.

Forecast for FY24:

Wilsons forecasts a full year FY24 EPS of 3.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.59.

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

IPL    INCITEC PIVOT LIMITED

Agriculture – Overnight Price: $2.99

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

First half results missed expectations. The miss was relatively broad-based, Goldman Sachs observes, with the greatest variation in the fertilisers business.

Incitec Pivot has indicated that, excluding commodity and FX movements, earnings are likely to be skewed to the second half, which the broker notes is typical for the business anyway.

Meanwhile, fertiliser distribution should benefit from improved production at Phosphate Hill and strong demand for the winter  crop.

No rating or target is provided.

This report was published on May 17, 2023.

Current Price is $2.99. Target price not assessed.
Current consensus price target is $3.43, suggesting upside of 14.8%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 18.00 cents and EPS of 34.00 cents.
At the last closing share price the estimated dividend yield is 6.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.3, implying annual growth of -30.4%.
Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 8.2.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 16.00 cents and EPS of 31.00 cents.
At the last closing share price the estimated dividend yield is 5.35%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 26.0, implying annual growth of -28.4%.
Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 11.5.

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

JHX    JAMES HARDIE INDUSTRIES PLC

Building Products & Services – Overnight Price: $37.78

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

James Hardie Industries posted a net profit result that was 6% above Goldman Sachs' estimates. The company has guided to first quarter adjusted net profit of US$145-165m, which is above the broker's estimates as well.

No full year guidance was provided for FY24 and management has been cautious regarding North American volumes. Still, the combination of a cautious outlook for volumes but relatively resilient margins somewhat de-risks the "FY24 trough", the broker adds.

Buy rating maintained. Target rises to $43.30.

This report was published on May 16, 2023.

Target price is $43.30 Current Price is $37.78 Difference: $5.52
If JHX meets the Goldman Sachs target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $42.83, suggesting upside of 13.4%(ex-dividends)
The company's fiscal year ends in February.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 178.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.14.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 187.5, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 209.72 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 214.9, implying annual growth of 14.6%.
Current consensus DPS estimate is 21.3, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 17.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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Jarden rates ((JHX)) as Neutral (3) –

Jarden considers the FY23 results "high quality". The broker understands why James Hardie Industries departed from its usual guidance for the full year and reverted to just the first quarter because of broader uncertainty regarding end-market demand.

 The broker is pleased with management's confidence that it can grow net average sales prices while FY24 total capital expenditure guidance is lower year-on-year.

Jarden upgrades to Overweight from Neutral, asserting the ability to hold profitable margins and grow share amid a pending downturn highlights the quality of the business. Target is raised to $40.00 from $31.60.

This report was published on May 16, 2023.

Target price is $40.00 Current Price is $37.78 Difference: $2.22
If JHX meets the Jarden target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $42.83, suggesting upside of 13.4%(ex-dividends)
The company's fiscal year ends in February.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 188.01 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 187.5, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 20.1.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 211.79 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 214.9, implying annual growth of 14.6%.
Current consensus DPS estimate is 21.3, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 17.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NVA    NOVA MINERALS LIMITED

Gold & Silver – Overnight Price: $0.33

Petra Capital rates ((NVA)) as Buy (1) –

There are over 20 gold prospects at Nova Minerals 85%-owned Estelle Gold Project in Alaska bracketed by the Korbel deposit in the North and the more recently discovered RPM mining complex in the South.

Higher grade ore from the latter has now been incorporated into the development plan for the former, explains Petra Capital.

However, it's thought the company will eventually pivot to a lower capex standalone development focused on the RPM deposit, a scenario upon which the broker's 97c target and Buy rating is based.

The analyst will assess results from the 2023 drilling campaign before revisiting development assumptions in the financial model.

This report was published on May 17, 2023.

Target price is $0.97 Current Price is $0.33 Difference: $0.64
If NVA meets the Petra Capital target it will return approximately 194% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

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

PBH    POINTSBET HOLDINGS LIMITED

Gaming – Overnight Price: $1.52

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

PointsBet Holdings has signed a binding agreement with Fanatics Betting and Gaming for the sale of its US business for $222m.

The company will continue to maintain the Australian and Canadian businesses which are expected to be at EBITDA breakeven on a stand-alone basis. The sale price of the US business is below Goldman Sachs' valuation.

The broker observes, upon completion of this transaction, the company will continue to hold a single-digit market share in a competitive but mature Australian market and a growth opportunity, albeit smaller than the US, in the Canadian business.

Neutral rating maintained. Target is steady at $1.62.

This report was published on May 16, 2023.

Target price is $1.62 Current Price is $1.52 Difference: $0.095
If PBH meets the Goldman Sachs target it will return approximately 6% (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 minus 86.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 1.77.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 70.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 2.18.

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

PME    PRO MEDICUS LIMITED

Medical Equipment & Devices – Overnight Price: $60.35

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

Pro Medicus has signed a seven-year deal with Gunderson Health System which operates seven hospitals and 65 clinics in three US states. The contract is based on Visage 7 and is expected to go live in the second half of 2023.

Goldman Sachs highlights the deal as indicative of Visage continuing to demonstrate an attractive value proposition with smaller institutions.

The Neutral rating and $51.60 target price are retained.

This report was published on May 16, 2023.

Target price is $51.60 Current Price is $60.35 Difference: minus $8.75 (current price is over target).
If PME meets the Goldman Sachs target it will return approximately minus 14% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $52.84, suggesting downside of -12.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 EPS of 56.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 107.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.8, implying annual growth of 28.6%.
Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 110.1.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 EPS of 72.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 83.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.9, implying annual growth of 27.6%.
Current consensus DPS estimate is 34.1, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 86.3.

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

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Moelis rates ((PME)) as Hold (3) –

Pro Medicus has signed a $20m contract with Gunderson Health System, which has seven hospitals and 65 clinics in Wisconsin, Minnesota and Iowa.

The contract is for professional services and data migration with Gunderson signing up to the full product suite, fully cloud deployed.

Moelis observes the company has now established a base in the IDN market and, with the trend towards fully bundled solutions, there is an ability to capture larger market share with each new customer win.

Moelis retains a Hold rating, believing a lot of the opportunity is factored into the price. Target is $65.59.

This report was published on May 16, 2023.

Target price is $65.59 Current Price is $60.35 Difference: $5.24
If PME meets the Moelis target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $52.84, suggesting downside of -12.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 27.00 cents and EPS of 55.50 cents.
At the last closing share price the estimated dividend yield is 0.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 108.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 54.8, implying annual growth of 28.6%.
Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 110.1.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 32.00 cents and EPS of 68.70 cents.
At the last closing share price the estimated dividend yield is 0.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 87.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.9, implying annual growth of 27.6%.
Current consensus DPS estimate is 34.1, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 86.3.

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

PWR    PETER WARREN AUTOMOTIVE HOLDINGS LIMITED

Automobiles & Components – Overnight Price: $2.64

Moelis rates ((PWR)) as Buy (1) –

Moelis expects immediate EPS accretion from Peter Warren Automotive's decision to pay -$45m for two Warren family-owned dealerships, to be funded via existing debt facilities.

The company has acquired 80% of Warwick Farm Toyota and 95% of Bathurst Toyota and VW.

Management notes the order book continues to grow organically, but largely due to supply constraints, with deliveries impacted by quarantine/port congestion issues.

The target falls to $3.19 from $3.37 after the broker lowers FY23 forecasts due to delayed vehicle deliveries, but raises FY24 and FY25 estimates for the acquisitions.

This report was published on May 18, 2023.

Target price is $3.19 Current Price is $2.64 Difference: $0.55
If PWR meets the Moelis target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $3.45, suggesting upside of 30.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 22.10 cents and EPS of 34.20 cents.
At the last closing share price the estimated dividend yield is 8.37%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.1, implying annual growth of -0.8%.
Current consensus DPS estimate is 22.0, implying a prospective dividend yield of 8.3%.
Current consensus EPS estimate suggests the PER is 8.0.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 21.90 cents and EPS of 31.20 cents.
At the last closing share price the estimated dividend yield is 8.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.46.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.7, implying annual growth of -13.3%.
Current consensus DPS estimate is 19.4, implying a prospective dividend yield of 7.3%.
Current consensus EPS estimate suggests the PER is 9.2.

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

SUL    SUPER RETAIL GROUP LIMITED

Automobiles & Components – Overnight Price: $12.21

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

Super Retail hosted a strategy briefing, upgrading FY26 store targets to around 802. A significant store refurbishment program will be undertaken.

The company has also flagged the revenue growth opportunity in the loyalty business, although Goldman Sachs notes gross profit margins are likely to be diluted, particularly for Rebel, given incremental sales will be supported by loyalty rewards that are rolled out from FY24.

The broker has come away more confident about the ability to execute and deliver resilient earnings against a weaker operating environment. Buy rating is reiterated. Target is reduced to $14.80 from $14.90.

This report was published on May 17, 2023.

Target price is $14.80 Current Price is $12.21 Difference: $2.59
If SUL meets the Goldman Sachs target it will return approximately 21% (excluding dividends, fees and charges).
Current consensus price target is $13.05, suggesting upside of 6.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 71.00 cents and EPS of 109.00 cents.
At the last closing share price the estimated dividend yield is 5.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 114.9, implying annual growth of 7.6%.
Current consensus DPS estimate is 72.4, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 63.00 cents and EPS of 96.00 cents.
At the last closing share price the estimated dividend yield is 5.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.5, implying annual growth of -17.8%.
Current consensus DPS estimate is 65.3, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 12.9.

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

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

Wilsons raises its target for Super Retail to $12.40 from $12.00 following minor upgrades to long-term store targets at the group's investor day, along with targeted revenue upside from the loyalty program.

Long-term store guidance was upgraded to 802 from 790 stores by FY26.

The analyst expects revenue and gross margins will normalise back to pre-covid levels and sees limited scope for material upside surprises to its forecasts. It's felt a premium valuation versus peers is not warranted, so the Market Weight rating is retained.

Management provided no quantitative guidance.

This report was published on May 19, 2023.

Target price is $12.40 Current Price is $12.21 Difference: $0.19
If SUL meets the Wilsons target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $13.05, suggesting upside of 6.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 73.80 cents and EPS of 120.40 cents.
At the last closing share price the estimated dividend yield is 6.04%.
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 114.9, implying annual growth of 7.6%.
Current consensus DPS estimate is 72.4, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 62.30 cents and EPS of 98.60 cents.
At the last closing share price the estimated dividend yield is 5.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.5, implying annual growth of -17.8%.
Current consensus DPS estimate is 65.3, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 12.9.

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

TPW    TEMPLE & WEBSTER GROUP LIMITED

Furniture & Renovation – Overnight Price: $4.95

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

Goldman Sachs notes a "very solid" trading update from Temple & Webster, with revenue growth tracking at around 10% over the past four weeks.

This is considered critical, given the timing of the return to double-digit revenue momentum was a key area of uncertainty for investors.

The broker revises forecasts to factor in greater growth investment, offset by longer-term fixed cost leverage. Buy rating maintained. Target is raised to $6.40 from $6.10.

This report was published on May 17, 2023.

Target price is $6.40 Current Price is $4.95 Difference: $1.45
If TPW meets the Goldman Sachs target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $4.73, suggesting downside of -4.5%(ex-dividends)
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 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 61.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.1, implying annual growth of -48.6%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 97.1.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 11.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.4, implying annual growth of 45.1%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 66.9.

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

UMG    UNITED MALT GROUP LIMITED

Agriculture – Overnight Price: $4.41

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

Wilsons expects operating profits will improve materially over the next 18 months, despite a soft 1H result, which was broadly in line with recently-lowered guidance. The result revealed the impact of lower-than-expected beer customer demand and higher finance costs.

Management confirmed FY23 normalised earnings (EBITDA) in the range of $140-160m.

Operating cash flow of $204m (excluding inventory funding and receivables factoring) compared to a -$64m outflow in the previous corresponding period. This outcome was due to higher commodity prices and higher finished goods inventory.

Malteries Soufflet continues to conduct due diligence and the analyst believes the conditional, non-binding and indicative bid at $5.00/share represents a fair takeover premium.

The target falls to $4.45 from $4.50. Market Weight.

This report was published on May 18, 2023.

Target price is $4.45 Current Price is $4.41 Difference: $0.04
If UMG meets the Wilsons target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $4.94, suggesting upside of 12.0%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of 8.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.5, implying annual growth of 93.3%.
Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 58.8.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 4.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 0.91%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.5, implying annual growth of 160.0%.
Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 22.6.

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

WEB    WEBJET LIMITED

Travel, Leisure & Tourism – Overnight Price: $7.46

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

Goldman Sachs updates its FY23 outlook for Webjet to reflect a stronger-than-expected trend in online website visits. This results in a 2.4% increase in FY23 EBITDA forecasts although FY24-25 is lowered by -0.7-1.3%, driven by FX changes.

The broker notes the B2B business has been the key focus of its positive view and, while Webjet has successfully demonstrated growth in market share in the Americas, the next re-rating for the stock will depend on an ability to demonstrate longer term growth towards the $10bn TTV target.

Webjet will report FY23 earnings on May 24. Buy rating maintained.Target is raised to $7.40 from $7.20.

This report was published on May 17, 2023.

Target price is $7.40 Current Price is $7.46 Difference: minus $0.06 (current price is over target).
If WEB meets the Goldman Sachs target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $6.96, suggesting downside of -6.8%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 0.00 cents and EPS of 11.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 67.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.2, implying annual growth of N/A.
Current consensus DPS estimate is 1.3, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 46.0.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 33.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.8, implying annual growth of 84.0%.
Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 25.0.

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

XRO    XERO LIMITED

Accountancy – Overnight Price: $109.50

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

FY23 results for Xero revealed UK subscriber growth ahead of Goldman Sachs forecast and at the top-end of management guidance. It's thought the company's FY24 opex expense target is now achievable, given a better-than-expected performance in the 2H.

The broker expects meaningful upgrades to consensus forecasts due to a stronger-than-expected free cash flow margin of 7.3% in FY23, alongside management's rule-of-40 focus.

One of Xero’s key performance metrics is the rule of 40, which tries to strike a balance between growth and profitability by targeting the revenue growth and free cash flow margin percentage to total at least 40%.

The broker raises its target by 3% to $130 and retains its Buy rating, given strong valuation support.

This report was published on May 19, 2023.

Target price is $130.00 Current Price is $109.50 Difference: $20.5
If XRO meets the Goldman Sachs target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $103.57, suggesting downside of -5.4%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 87.78 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 124.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 87.8, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 124.7.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 128.93 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 84.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 145.3, implying annual growth of 65.5%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 75.4.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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