Australian Broker Call *Extra* Edition – Aug 24, 2023

This story features AUSTRALIAN CLINICAL LABS LIMITED, and other companies. For more info SHARE ANALYSIS: ACL

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)

ACL   AKE (2)   ALU   AUB (2)   BHP   BSL   COL   EHE   EVS   GEM   HUB   IAG   INA (2)   KGN   MAD   MP1   NAN   NHF   PWR   WBC  

ACL    AUSTRALIAN CLINICAL LABS LIMITED

Healthcare services – Overnight Price: $2.77

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

FY23 revenue for Australian Clinical Labs missed the consensus forecast by -2% as an 11% recovery in base volumes could not counter an -86% decline in covid revenue.

While the broker expects base revenue will steadily improve, ongoing referral/funding headwinds make the precise trajectory difficult to forecast.

Management confirmed the removal of all ‘covid costs’ before the end of the 1H, implying a clean cost base for the 2H and beyond, suggest the analysts. FY24 earnings (EBIT) guidance is in the range of $65m-70m.

Goldman Sachs does not have a rating or target for the company.

This report was published on August 23, 2023.

Current Price is $2.77. Target price not assessed.

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

AKE    ALLKEM LIMITED

New Battery Elements – Overnight Price: $14.07

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

Allkem's FY23 results were largely in line with expectations held by Goldman Sachs and now the focus turns to FY24 execution of growth projects. These include permitting at James Bay, development at Sal de Vida, and ramp-up of Olaroz Stage 2/Naraha.

FY24 production guidance at the Olaroz operations for 22-26kt lithium carbonate for Stage 1 and Stage 2 was in line with the consensus forecast, while guidance at Mt Cattlin for 210-230kt exceeded the consensus estimate for 202kt.

Livent and Allkem are targeting completion of the proposed merger by around the end of 2023.

Goldman Sachs retains its Buy rating and increases its target to $17.20 from $17.10.

This report was published on August 23, 2023.

Target price is $17.20 Current Price is $14.07 Difference: $3.13
If AKE meets the Goldman Sachs target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $17.83, suggesting upside of 26.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 80.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 115.5, implying annual growth of 12.1%.
Current consensus DPS estimate is 1.7, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 238.47.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.9, implying annual growth of 35.8%.
Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 9.0.

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

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Jarden rates ((AKE)) as Downgrade to Neutral from Buy (3) –

On Jarden's observation, Allkem released a "strong" FY23 performance but risks remain around key project deliveries. Guidance for FY24 is labeled as "robust".

One of the outcomes sees Jarden lifting unit cost forecasts for Mt Cattlin for the remaining 4.5 year lifespan, due to a higher than previously guided strip ratio.

On the expectation that lithium prices will deteriorate further, the broker downgrades its rating to Neutral from Buy. Price target has climbed a smidgen to $14.60 (was $14.50).

This report was published on August 23, 2023.

Target price is $14.60 Current Price is $14.07 Difference: $0.53
If AKE meets the Jarden target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $17.83, suggesting upside of 26.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 75.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.64.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 115.5, implying annual growth of 12.1%.
Current consensus DPS estimate is 1.7, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 58.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.9, implying annual growth of 35.8%.
Current consensus DPS estimate is 4.0, implying a prospective dividend yield of 0.3%.
Current consensus EPS estimate suggests the PER is 9.0.

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

ALU    ALTIUM

Hardware & Equipment – Overnight Price: $45.95

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

Jarden reports Altium's FY23 proved stronger than market consensus, though it failed to meet its own forecasts. Revenue proved much stronger with an in-line margin.

FY24 revenue guidance of US$315-325m easily beats all forecasts. EBITDA margin of 35%-37% suggests forecasts for US$115m in FY24 do not need to change.

Earnings estimates have gone up. Jarden explains it remains hesitant because the PCB market is small and mature and thus questions should be asked about this company's ARPU against strong competitors.

Target lifts to $37.60 from $32.20. Underweight rating retained.

This report was published on August 23, 2023.

Target price is $37.60 Current Price is $45.95 Difference: minus $8.35 (current price is over target).
If ALU meets the Jarden target it will return approximately minus 18% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $42.61, suggesting downside of -7.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 101.41 cents and EPS of 92.73 cents.
At the last closing share price the estimated dividend yield is 2.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.0, implying annual growth of N/A.
Current consensus DPS estimate is 95.3, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 47.4.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 125.19 cents and EPS of 114.42 cents.
At the last closing share price the estimated dividend yield is 2.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 40.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 124.1, implying annual growth of 27.9%.
Current consensus DPS estimate is 104.0, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 37.0.

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

AUB    AUB GROUP LIMITED

Insurance – Overnight Price: $29.59

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

FY23 underlying profit was pre-guided by AUB Group but FY24 guidance for between $154-164m (midpoint $159m) falls short of the $165m expected by consensus. The final 47cps dividend was in line with consensus.

Management upgraded medium-term margin targets across most divisions (ex Agency) with a focus on scale and optimisation of costs.

Goldman Sachs makes small earnings downgrades to forecasts with the FY24 underlying profit estimate broadly at the midpoint of management's guidance range for FY24.

The broker's target decreases to $31 from $32 to reflect FY24 guidance and the Buy rating is maintained.

This report was published on August 23, 2023.

Target price is $31.00 Current Price is $29.59 Difference: $1.41
If AUB meets the Goldman Sachs target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $33.99, suggesting upside of 14.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 76.00 cents and EPS of 147.00 cents.
At the last closing share price the estimated dividend yield is 2.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 151.1, implying annual growth of 131.2%.
Current consensus DPS estimate is 82.0, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 19.6.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 84.00 cents and EPS of 161.00 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.38.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 164.7, implying annual growth of 9.0%.
Current consensus DPS estimate is 91.0, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 18.0.

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 ((AUB)) as Overweight (2) –

AUB Group's FY23 was largely pre-guided and while FY24 guidance might look a bit soft, Jarden points out all but one division achieved stronger revenues and margins in FY23.

That's sufficient reason for the broker to remain "constructive" for the year ahead. Small negative adjustments have been made to forecasts.

Overweight rating while the price target shifts to $32.50 from $31.85.

This report was published on August 23, 2023.

Target price is $32.50 Current Price is $29.59 Difference: $2.91
If AUB meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $33.99, suggesting upside of 14.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 94.00 cents and EPS of 151.10 cents.
At the last closing share price the estimated dividend yield is 3.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 151.1, implying annual growth of 131.2%.
Current consensus DPS estimate is 82.0, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 19.6.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 111.00 cents and EPS of 178.10 cents.
At the last closing share price the estimated dividend yield is 3.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 164.7, implying annual growth of 9.0%.
Current consensus DPS estimate is 91.0, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 18.0.

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

BHP    BHP GROUP LIMITED

Bulks – Overnight Price: $44.03

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

BHP Group's FY23 underlying earnings of US$28bn and profit of US$13.4bn were broadly in line with Goldman Sachs forecasts.

The operating cost performance was slightly better-than-expected at Pilbara iron ore and Queensland metallurgical coal, while the final dividend of US80cps was in line with the broker's forecast.

The analysts believe the dividend payout ratio will reduce to around 50% going forward, given the increase in medium-term group capex guidance to around US$11bn. Consensus was only expecting US$7-8bn over FY26-28.

Escondida copper production is expected to increase to 1.2-1.3Mt in FY25-26, ahead of Goldman's 1.1Mt forecast on a bring forward of higher grades and an expected lift in mining rates.

The target rises to $46.10 from $45.60. Buy.

This report was published on August 23, 2023.

Target price is $46.10 Current Price is $44.03 Difference: $2.07
If BHP meets the Goldman Sachs target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $43.77, suggesting downside of -0.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 177.98 cents and EPS of 357.46 cents.
At the last closing share price the estimated dividend yield is 4.04%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 359.6, implying annual growth of N/A.
Current consensus DPS estimate is 214.2, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 12.2.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 158.54 cents and EPS of 317.08 cents.
At the last closing share price the estimated dividend yield is 3.60%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 424.5, implying annual growth of 18.0%.
Current consensus DPS estimate is 259.6, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 10.4.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

BSL    BLUESCOPE STEEL LIMITED

Steel & Scrap – Overnight Price: $20.95

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

BlueScope Steel's FY23 result slightly outpaced consensus' and Goldman Sachs's forecasts thanks to a good showing from the Australian steel business and lower than forecast conversion costs. Coated Products Asia also outpaced, while the US was a miss.

Management guided to steady earnings for the December half and the broker cuts its earnings (EBIT) forecasts accordingly.

The Port Kembla blast furnace reline has been approved with capital expenditure being revised up to $1.15bn from $1bn at the pre-feasibility study, but in line with the broker. Goldman Sachs says that in the light of 30% to 40% inflation, this was pleasing.

Especially when compared with the company's approval of an extra 240ktpa of metal coating capacity at a cost of -$415m (compared with -$300m initially). The North Star expansion is running 6 months behind.

EPS forecasts fall -6% in FY24; -2% in FY25; and -6% in FY26 to reflect lower US HRC prices.

Buy rating retained. Target price rises 4% to $23.70 from $22.70.

This report was published on August 22, 2023.

Target price is $23.70 Current Price is $20.95 Difference: $2.75
If BSL meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $21.36, suggesting upside of 2.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 50.00 cents and EPS of 244.00 cents.
At the last closing share price the estimated dividend yield is 2.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 197.4, implying annual growth of -9.2%.
Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 50.00 cents and EPS of 221.00 cents.
At the last closing share price the estimated dividend yield is 2.39%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 192.8, implying annual growth of -2.3%.
Current consensus DPS estimate is 50.0, implying a prospective dividend yield of 2.4%.
Current consensus EPS estimate suggests the PER is 10.9.

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

COL    COLES GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $15.95

Jarden rates ((COL)) as Neutral (3) –

Coles Group's FY23 missed the mark, with Jarden highlighting theft went up, so did sosts, while margins went down. The broker anticipates the same trends to dominate in FY24.

Earnings estimates have been culled by -12-18% for the years ahead. Jarden maintains Coles is at least two years behind main competitor Woolworths ((WOW)) in its store, data and supply chain investment.

While the broker holds a positive view on the sector overall in Australia, Coles is its least preferred exposure. Target falls to $15.70 from $17.50. Neutral.

This report was published on August 23, 2023.

Target price is $15.70 Current Price is $15.95 Difference: minus $0.25 (current price is over target).
If COL meets the Jarden target it will return approximately minus 2% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $16.70, suggesting upside of 4.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 60.00 cents and EPS of 78.90 cents.
At the last closing share price the estimated dividend yield is 3.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.8, implying annual growth of -10.6%.
Current consensus DPS estimate is 61.7, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 21.3.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 65.00 cents and EPS of 86.10 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.52.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 81.9, implying annual growth of 9.5%.
Current consensus DPS estimate is 67.0, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 19.5.

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

EHE    ESTIA HEALTH LIMITED

Aged Care & Seniors – Overnight Price: $3.13

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

Moelis starts its update with pointing out suitor Bain has revised its non-binding cash proposal for Estia Health to $3.20 a share, and the latter's board has agreed into a scheme agreement.

This makes the FY23 performance rather obsolete, but for what it's worth, EBITDA slightly missed the broker's forecast (-3%).

The broker has still made the effort to lift its FY24 forecast by 2%. New target of $3.20 aligns with the scheme. Downgrade to Hold.

This report was published on August 23, 2023.

Target price is $3.30 Current Price is $3.13 Difference: $0.17
If EHE meets the Moelis target it will return approximately 5% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 8.00 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 2.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.30.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 8.90 cents and EPS of 11.10 cents.
At the last closing share price the estimated dividend yield is 2.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.20.

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

EVS    ENVIROSUITE LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.08

Moelis rates ((EVS)) as Buy (1) –

EnviroSuite's FY23 report is described as "incrementally positive". The broker notes there was a one-off event, otherwise group ARR had increased by 18% year-on-year, but still grew by 12%.

As the company's software is transitioning from 'nice to have' to 'must have' for compliance and social licenses to operate, Moelis sees the future underpinned by secular trend demand growth.

The company is expected to achieve positive free cash flow by H1 FY25, considered a key catalyst.

Buy rating retained. Target price slips to 15c from 17c.

This report was published on August 23, 2023.

Target price is $0.15 Current Price is $0.08 Difference: $0.074
If EVS meets the Moelis target it will return approximately 97% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 38.00.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 76.00.

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

GEM    G8 EDUCATION LIMITED

Childcare – Overnight Price: $1.09

Moelis rates ((GEM)) as Hold (3) –

G8 Education's interim EBIT proved 9% ahead of Moelis' forecast. The broker points at margin support after a 6% fee increase in January.

Moelis highlights occupancy growth remains constrained by workforce shortages in some areas of the network. Management at the firm estimates some 80% of centres are operating at circa 80% occupancy.

Higher support costs lead to reduced estimates for FY24. Higher occupancy levels are needed for the broker to change its neutral stance.

Hold. Target $1.21, down from $1.27 previously.

This report was published on August 23, 2023.

Target price is $1.21 Current Price is $1.09 Difference: $0.12
If GEM meets the Moelis target it will return approximately 11% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY23:

Moelis forecasts a full year FY23 dividend of 5.30 cents and EPS of 7.50 cents.
At the last closing share price the estimated dividend yield is 4.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.53.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 6.30 cents and EPS of 8.40 cents.
At the last closing share price the estimated dividend yield is 5.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.98.

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

HUB    HUB24 LIMITED

Wealth Management & Investments – Overnight Price: $30.99

Jarden rates ((HUB)) as Neutral (3) –

Hub24's FY23 result "beat" occurred largely because of a lower tax rate, explains Jarden. But the broker does add any benefits from it seem sustainable for the near term.

Jarden observes net flows have started strongly in FY24, while support is still to flow through from the agreement with Equity Trustees ((EQT)).

While further growth seems well underpinned, the broker does have a problem with where the shares are trading, post result release rally.

Hence the Neutral rating remains in place. Forecasts have been lifted. Price target moves to $32 from $28.20.

This report was published on August 23, 2023.

Target price is $32.00 Current Price is $30.99 Difference: $1.01
If HUB meets the Jarden target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $34.18, suggesting upside of 10.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 36.70 cents and EPS of 81.10 cents.
At the last closing share price the estimated dividend yield is 1.18%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 82.4, implying annual growth of 72.7%.
Current consensus DPS estimate is 38.1, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 37.6.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 47.00 cents and EPS of 104.00 cents.
At the last closing share price the estimated dividend yield is 1.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 29.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 102.8, implying annual growth of 24.8%.
Current consensus DPS estimate is 48.3, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 30.1.

Market Sentiment: 0.3
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: $5.83

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

Insurance Australia Group's FY23 underlying margins appear to have fallen a touch shy of consenus and just nosed out Goldman Sachs, and just missed reported margin forecasts.

FY24 guidance disappointed. While low double digit gross written premium growth impressed the broker, this was countered in part by a weaker reported insurance margin and poorer than expected insurance profits.

Goldman Sachs doesn't like the margin trajectory given continuing claims inflation and perils allowances, but considers rate increases to be impressive.

Neutral rating and $5.87 target price retained.

This report was published on August 22, 2023.

Target price is $5.87 Current Price is $5.83 Difference: $0.04
If IAG meets the Goldman Sachs target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $5.85, suggesting upside of 0.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 26.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 4.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.9, implying annual growth of 2.9%.
Current consensus DPS estimate is 26.8, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 16.7.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 30.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 5.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.58.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 39.3, implying annual growth of 12.6%.
Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 14.8.

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

INA    INGENIA COMMUNITIES GROUP

Aged Care & Seniors – Overnight Price: $4.03

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

FY23 earnings (EBIT) for Ingenia Communities came in at the top end of management guidance and beat the consensus forecast by 1% with broadly in-line results across all divisions, explains Goldman Sachs.

The broker highlights the Rental business performed well, driven by solid CPI-plus price increases and peak occupancy given the current rental supply shortage. The Holidays segment continues to grow strongly though management noted the growth rate is moderating.

The company also announced an agreement to extend its joint venture with Sun Communities by seven years, with ongoing investment planned for greenfield Land Lease communities.

As developments ramp-up, management expects settlements from the joint venture will be a larger proportion of reported settlements in the next three years. The Neutral rating and $4.20 target are unchanged.

This report was published on August 23, 2023.

Target price is $4.20 Current Price is $4.03 Difference: $0.17
If INA meets the Goldman Sachs target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $4.54, suggesting upside of 12.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 EPS of 20.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.7, implying annual growth of 37.4%.
Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 18.6.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 EPS of 22.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.3, implying annual growth of 30.4%.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 14.2.

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 ((INA)) as Overweight (2) –

Following a volatile FY23, Jarden argues Ingenia Communities seems better positioned to benefit from the attractive structural growth in
LLC communities and tourism, also because FY24 guidance has been placed on more conservative footing.

The broker believes its own forecast for 11% EPS CAGR over FY23-26 might well be beaten given the inherent operating leverage.

And while investors might hold off while awaiting more evidence of strategy execution, Jarden argues the valuation here looks attractive, despite an elevated looking PE ratio.

Overweight. Target lifts to $4.70 from $4.40.

This report was published on August 23, 2023.

Target price is $4.70 Current Price is $4.03 Difference: $0.67
If INA meets the Jarden target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $4.54, suggesting upside of 12.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 10.70 cents and EPS of 22.00 cents.
At the last closing share price the estimated dividend yield is 2.66%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.7, implying annual growth of 37.4%.
Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 18.6.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 11.50 cents and EPS of 25.50 cents.
At the last closing share price the estimated dividend yield is 2.85%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.3, implying annual growth of 30.4%.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 14.2.

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

KGN    KOGAN.COM LIMITED

Retailing – Overnight Price: $5.00

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

Jarden has three new analysts in charge of analysing Kogan.com. On their initial observation, the online retailer did not quite meet its own pre-announced guidance for FY23.

Jarden questions the "quality" of the indicated July EBITDA as share-based comparison was up 18% year-on-year against flat underlying people costs.

The broker maintains Kogan.com will be facing significant headwinds, also shown by no growth in sales in July while others in the sector saw acceleration in growth.

The broker has downgraded forecasts, which reduces the price target to $4.50 (from $4.60). Underweight rating retained.

This report was published on August 23, 2023.

Target price is $4.50 Current Price is $5.00 Difference: minus $0.5 (current price is over target).
If KGN meets the Jarden target it will return approximately minus 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 8.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 58.82.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 9.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 53.19.

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

MAD    MADER GROUP LIMITED

Mining Sector Contracting – Overnight Price: $7.60

Moelis rates ((MAD)) as Hold (3) –

Mader Group's FY23 marked another record result, but it was as expected given the company had pre-guided the result.

Moelis points out guidance for FY24 implies growth of at least 30% in net profits, supported by a 20% increase in margins.

Recruitment of skilled labour remains the primary driver of upside risk, the broker adds. Hold rating retained on higher estimates.

Moelis' forecasts now align with management's guidance of $1bn in revenue and $65m in net profits by FY26. Target improves to $7.65 from $6.31.

This report was published on August 23, 2023.

Target price is $7.65 Current Price is $7.60 Difference: $0.05
If MAD meets the Moelis target it will return approximately 1% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 7.40 cents and EPS of 24.60 cents.
At the last closing share price the estimated dividend yield is 0.97%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 30.89.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 8.50 cents and EPS of 28.30 cents.
At the last closing share price the estimated dividend yield is 1.12%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.86.

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

MP1    MEGAPORT LIMITED

Cloud services – Overnight Price: $12.00

Goldman Sachs rates ((MP1)) as Buy (1) –

The key focus at largely pre-released FY23 results was strong FY24 guidance, according to Goldman Sachs, with management expecting earnings (EBITDA) of between $51-57m, a 12% beat versus the consensus forecast.

The company's medium-term earnings potential is highlighted by the exit earnings margin at June 30 of 31% which was much stronger than the analyst forecast. Management intends re-investing around -$10m in FY24 to support outer-year growth.

The broker suggests benefits from the around 20 new sales hires will likely be seen in FY24 exit metrics and FY25 revenue growth.

The target rises to $12.10 from $10.60. Buy rating retained.

This report was published on August 23, 2023.

Target price is $12.10 Current Price is $12.00 Difference: $0.1
If MP1 meets the Goldman Sachs target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $13.58, suggesting upside of 13.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 200.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.7, 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 137.9.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 16.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 75.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.0, implying annual growth of 129.9%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 60.0.

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

NAN    NANOSONICS LIMITED

Medical Equipment & Devices – Overnight Price: $4.10

Goldman Sachs rates ((NAN)) as Sell (5) –

Goldman Sachs considers the most important metric from FY23 results for Nanosonics was the global new installed base growth of 2,600 units, which was below the prior target set by management for 3,000 per year.

In seeking answers for this shortfall, the broker notes short-term restrictions on hospital budgets (management's excuse), but also points to the impact of losing GE Health as a commercial/distribution partner in February last year.

The long-awaited product launch of Coris has been delayed for around the tenth time, in the analysts' estimation, as product testing is now required in the US rather than Australia, as previously expected.

FY24 gross margin guidance is for 75-77%, which is -170-370bps below FY23.

The target price drops to $3.80 from $4.40 on lower gross margin assumptions and the Sell rating is maintained.

This report was published on August 23, 2023.

Target price is $3.80 Current Price is $4.10 Difference: minus $0.3 (current price is over target).
If NAN meets the Goldman Sachs target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $4.52, suggesting upside of 10.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 5.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 82.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.2, implying annual growth of -21.2%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 78.8.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 6.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.5, implying annual growth of 44.2%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 54.7.

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

NHF    NIB HOLDINGS LIMITED

Insurance – Overnight Price: $7.79

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

nib Holdings FY23 result nosed out consensus' and Goldman Sachs's forecasts, thanks to strong top line growth and a decent operational performance. Net margins were a solid beat and June-half revenue was good.

On the flipside, a $71m giveback and higher IT/Cyber/marketing and impairments (much of which the broker believes can be unwound) took the shine off the second-half performance.

The broker appreciates the company's capital position, policy-holder growth outlook and market-share gains, although claims inflation and a higher tax rate are expected to rein in returns. The broker also expects a recovery in the non-Australian Residential House Insurance businesses.

Buy rating and $8.75 target price retained.

This report was published on August 22, 2023.

Target price is $8.75 Current Price is $7.79 Difference: $0.96
If NHF meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $8.55, suggesting upside of 9.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 31.00 cents and EPS of 44.00 cents.
At the last closing share price the estimated dividend yield is 3.98%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 45.8, implying annual growth of 10.6%.
Current consensus DPS estimate is 29.9, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 17.0.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 33.00 cents and EPS of 47.00 cents.
At the last closing share price the estimated dividend yield is 4.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 48.6, implying annual growth of 6.1%.
Current consensus DPS estimate is 31.0, implying a prospective dividend yield of 4.0%.
Current consensus EPS estimate suggests the PER is 16.0.

Market Sentiment: 0.0
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: $2.67

Moelis rates ((PWR)) as Buy (1) –

It is Moelis' view that Peter Warren Automotive's FY23 result was broadly in line with its own expectations, but slightly below what market consensus was expecting.

More pressure on the gross margin surprised negatively while management also referred to higher costs to service debt. No quantified FY24 guidance was provided.

With more margin pressure expected in FY24, also because of the Toyota acquisition, Moelis has left its forecasts largely unchanged. It is suggested the shares look "good value".

Target rises slightly to $3.33 from $3.19. Buy.

This report was published on August 23, 2023.

Target price is $3.33 Current Price is $2.67 Difference: $0.66
If PWR meets the Moelis target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $3.35, suggesting upside of 25.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 21.80 cents and EPS of 31.10 cents.
At the last closing share price the estimated dividend yield is 8.16%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.5, implying annual growth of -16.1%.
Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 7.0%.
Current consensus EPS estimate suggests the PER is 9.7.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 20.60 cents and EPS of 29.30 cents.
At the last closing share price the estimated dividend yield is 7.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.1, implying annual growth of 2.2%.
Current consensus DPS estimate is 18.3, implying a prospective dividend yield of 6.9%.
Current consensus EPS estimate suggests the PER is 9.5.

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

WBC    WESTPAC BANKING CORPORATION

Banks – Overnight Price: $21.14

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

Westpac's June-quarter trading update nosed out Goldman Sachs's earnings forecasts but costs disappointed.

Earnings were down on the previous half but largely in line. The company's statutory performance improved, observes the broker, thanks to gains from hedging, but these were outpaced by higher expenses.

EPS forecasts fall -5% in FY23; -2.9% in FY24; and -4.8% in FY25, the broker forecasting continued pressure on net interest margins and rising costs.

Neutral rating retained. Target price falls to $22.57 from $23.39.

This report was published on August 22, 2023.

Target price is $22.57 Current Price is $21.14 Difference: $1.43
If WBC meets the Goldman Sachs target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $22.85, suggesting upside of 8.1%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 140.00 cents and EPS of 194.00 cents.
At the last closing share price the estimated dividend yield is 6.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.90.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 204.8, implying annual growth of 28.1%.
Current consensus DPS estimate is 140.0, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 10.3.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 140.00 cents and EPS of 180.00 cents.
At the last closing share price the estimated dividend yield is 6.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 185.5, implying annual growth of -9.4%.
Current consensus DPS estimate is 141.0, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 11.4.

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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