Australian Broker Call *Extra* Edition – Sep 14, 2023

This story features BREVILLE GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: BRG

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)

BRG   BSA   CAR   CBA   CSL   IPL (2)   PNR   RED   RFG   RMD   SHV   TIE   WGX  

BRG    BREVILLE GROUP LIMITED

Household & Personal Products – Overnight Price: $22.49

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

Wilsons takes on board the second quarter reporting from peers that revealed broad softness in demand in both North America and EMEA. Several have downgraded sales guidance for the second half while retailer destocking appears to have stabilised.

Wilsons makes no changes to its estimates for Breville Group, expecting FY24 EBIT of $189.9m, and retains a Market Weight rating and $25.70 target.

This report was published on September 12, 2023.

Target price is $25.70 Current Price is $22.49 Difference: $3.21
If BRG meets the Wilsons target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $26.40, suggesting upside of 17.9%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 35.00 cents and EPS of 88.70 cents.
At the last closing share price the estimated dividend yield is 1.56%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 85.5, implying annual growth of 10.7%.
Current consensus DPS estimate is 32.9, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 26.2.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 40.00 cents and EPS of 102.10 cents.
At the last closing share price the estimated dividend yield is 1.78%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.9, implying annual growth of 14.5%.
Current consensus DPS estimate is 37.5, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 22.9.

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

BSA    BSA LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $0.58

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

BSA's FY23 results reflected ongoing momentum in the communication, utility and infrastructure business (CUI), Canaccord Genuity comments. The APS Fire NSW business remains for sale with the Queensland business having been divested in June.

Canaccord Genuity notes an adverse EBITDA impact in FY23 of -$14.3m in relation to discontinued operations. At this stage the broker allows for a -$1m loss in FY24 in relation to the APS Fire NSW operation should it be held for the full year, although this is deemed unlikely.

The focus is now exclusively on CUI business and the broker forecasts a modest uplift to FY24 EBITDA as operations consolidate and initiatives emerge to grow organically. Buy rating retained. Target is $1.25.

This report was published on September 12, 2023.

Target price is $1.25 Current Price is $0.58 Difference: $0.67
If BSA meets the Canaccord Genuity target it will return approximately 116% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 12.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.83.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 13.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 4.46.

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

CAR    CARSALES.COM LIMITED

Automobiles & Components – Overnight Price: $29.72

Jarden rates ((CAR)) as Neutral (3) –

Jarden envisages continued momentum for Carsales although the current valuation is not seen as compelling.

The areas of opportunity identified at the investor briefing include dealer subscription volumes, which are only 32% penetrated and provide ample room for growth.

The broker considers the US market opportunity large and with new adjacent revenue potential. There is future potential in marine and data with marine being one of the main opportunities and the company continuing to build data complexity via the proprietary Trader Traxx platform. Neutral rating and $25.10 target maintained.

This report was published on September 12, 2023.

Target price is $25.10 Current Price is $29.72 Difference: minus $4.62 (current price is over target).
If CAR meets the Jarden target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $27.73, suggesting downside of -7.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 EPS of 75.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 82.2, implying annual growth of -54.7%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 2.2%.
Current consensus EPS estimate suggests the PER is 36.6.

Forecast for FY25:

Jarden forecasts a full year FY25 EPS of 90.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 93.9, implying annual growth of 14.2%.
Current consensus DPS estimate is 74.7, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 32.0.

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

CBA    COMMONWEALTH BANK OF AUSTRALIA

Banks – Overnight Price: $101.70

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

CommBank deserves to trade at a premium valuation, Jarden asserts, although the issue is about the extent. In the best case scenario the broker can envisage the return on equity lifting to around 16.5% over time, having fallen over the past decade to 14%.

It is still difficult to justify the current valuation and, hence, Jarden reiterates an Underweight rating. Given a lack of catalysts for a material de-rating and the relative defensive appeal the broker suspects the shares could be range bound over the near term. Target is $98.30.

This report was published on September 12, 2023.

Target price is $98.30 Current Price is $101.70 Difference: minus $3.4 (current price is over target).
If CBA meets the Jarden target it will return approximately minus 3% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $91.08, suggesting downside of -10.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 450.00 cents and EPS of 561.00 cents.
At the last closing share price the estimated dividend yield is 4.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 567.6, implying annual growth of -6.0%.
Current consensus DPS estimate is 457.7, implying a prospective dividend yield of 4.5%.
Current consensus EPS estimate suggests the PER is 18.0.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 452.00 cents and EPS of 569.00 cents.
At the last closing share price the estimated dividend yield is 4.44%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 586.1, implying annual growth of 3.3%.
Current consensus DPS estimate is 469.5, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 17.4.

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

CSL    CSL LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $269.21

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

Jarden observes preferential reimbursement in the upcoming 2023-24 season has once again been made by the US CMS  for Seqirus vaccines.

The broker makes no changes to its FY24 revenue etimate from Seqirus, although is aware of one large US distributor that has experienced a significant increase in demand for the products, driven by the higher reimbursement rate they will receive administering Flucelvax (Seqirus) versus competing egg-based vaccines.

Jarden retains an Overweight rating and $322.25 target for CSL.

This report was published on September 12, 2023.

Target price is $322.25 Current Price is $269.21 Difference: $53.04
If CSL meets the Jarden target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $330.53, suggesting upside of 23.6%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 345.40 cents and EPS of 827.00 cents.
At the last closing share price the estimated dividend yield is 1.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.55.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 969.7, implying annual growth of N/A.
Current consensus DPS estimate is 423.3, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 27.6.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 409.52 cents and EPS of 1023.13 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 26.31.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1233.6, implying annual growth of 27.2%.
Current consensus DPS estimate is 541.3, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 21.7.

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

IPL    INCITEC PIVOT LIMITED

Agriculture – Overnight Price: $3.05

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

Goldman Sachs revises FY23 fertiliser prices lower in line with Incitec Pivot's forecasts. In addition, the broker lowers FY23/24 DAP manufacturing volume estimates, lifting the cost of production to account for higher gas costs and costs associated with the sulphuric acid drying tower.

On the positive side, upward revisions are made to the explosives business across the forecast profile. The company has indicated completion of the Waggaman ammonia plant sale remains subject to US anti-trust clearance.

Goldman Sachs has no rating or target at present.

This report was published on September 12, 2023.

Current Price is $3.05. Target price not assessed.
Current consensus price target is $3.23, suggesting upside of 3.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 14.00 cents and EPS of 27.00 cents.
At the last closing share price the estimated dividend yield is 4.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.4, implying annual growth of -43.7%.
Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 12.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 3.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.2, implying annual growth of -27.9%.
Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 14.7.

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

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Jarden rates ((IPL)) as Neutral (3) –

Incitec Pivot has flagged continued weakness in fertilisers which has put downward pressure on market estimates into the FY23 result. In contrast increased production at Moranbah, despite tight ammonia supply, shows the resilience of the explosives business.

Jarden suspects this update may make it harder to generate an attractive offer for the fertilisers business and it strengthens the case against the planned demerger of explosives and fertilisers from the consolidated group.

Gas supply constraints to Phosphate Hill and a lower-than-expected realised DAP price leads the broker to forecast a -$26m EBIT loss in fertiliser manufacturing in the second half. Neutral rating and $2.85 target maintained.

This report was published on September 12, 2023.

Target price is $2.85 Current Price is $3.05 Difference: minus $0.2 (current price is over target).
If IPL meets the Jarden target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $3.23, suggesting upside of 3.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 14.90 cents and EPS of 28.50 cents.
At the last closing share price the estimated dividend yield is 4.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.4, implying annual growth of -43.7%.
Current consensus DPS estimate is 15.8, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 10.6.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 10.40 cents and EPS of 20.80 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.66.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 21.2, implying annual growth of -27.9%.
Current consensus DPS estimate is 11.1, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 14.7.

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

PNR    PANTORO LIMITED

Gold & Silver – Overnight Price: $0.05

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

In assessing the gold sector, Petra Capital believes investors will continue to look to gold for risk diversification and as a currency alternative to the US dollar in uncertain times.

Cost pressures may be ongoing yet producers are making money and balance sheets are strong. While dividends might feature, the broker suspects it more likely cash will be used to fund corporate activity with a focus on domestic gold assets.

Pantoro appears very cheap, the broker asserts, as production ramps up into a robust gold price environment. Buy rating and $0.14 target.

This report was published on September 8, 2023.

Target price is $0.14 Current Price is $0.05 Difference: $0.094
If PNR meets the Petra Capital target it will return approximately 204% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 4.18.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.11.

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

RED    RED 5 LIMITED

Gold & Silver – Overnight Price: $0.21

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

In assessing the gold sector, Petra Capital believes investors will continue to look to gold for risk diversification and as a currency alternative to the US dollar in uncertain times.

Cost pressures may be ongoing yet producers are making money and balance sheets are strong. While dividends might feature, the broker suspects it more likely cash will be used to fund corporate activity with a focus on domestic gold assets.

Individually, Red 5 has moved into the middle of the peer group and Petra Capital assesses it is "extremely cheap" relative to small-scale producers. Buy rating retained. Target is $0.34.

This report was published on September 8, 2023.

Target price is $0.34 Current Price is $0.21 Difference: $0.13
If RED meets the Petra Capital target it will return approximately 62% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 0.00 cents and EPS of 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.40.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.75.

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

RFG    RETAIL FOOD GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $0.05

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

Petra Capital assesses incremental profit from Rack 'em Bones should come from improved utilisation of the pizza oven and, in turn, make it a relatively straightforward decision for quick service franchisees.

Management has called out the 3.3% incremental impact on same-store sales from the Rack 'em Bones ribs offering which the broker expects will only improve in time.

The broker continues to envisage significant upside in the share price with Retail Food trading on an FY24 PE ratio of circa 6.0x.

The heavy lifting from the multi-year turnaround is complete and, combined with a strong balance sheet, should enable management to focus on growth. Petra Capital reiterates a Buy rating and 9c target.

This report was published on September 8, 2023.

Target price is $0.09 Current Price is $0.05 Difference: $0.039
If RFG meets the Petra Capital target it will return approximately 76% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 0.20 cents and EPS of 0.70 cents.
At the last closing share price the estimated dividend yield is 3.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.29.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.40 cents and EPS of 1.00 cents.
At the last closing share price the estimated dividend yield is 7.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.10.

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

RMD    RESMED INC

Medical Equipment & Devices – Overnight Price: $23.25

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

Wilsons observes a "scare" regarding the perceived threat that GLP-1 receptor agonists pose to CPAP has wiped several points off the ResMed valuation, putting it back to "pre–Brightree levels".

The broker questions the reaction in the share price, given these agonists have been used for almost a decade to manage obesity and the issue was never raised, remaining sceptical about the assumed threat to the company's business. Overweight retained. Target is steady at $36.25.

This report was published on September 12, 2023.

Target price is $36.25 Current Price is $23.25 Difference: $13
If RMD meets the Wilsons target it will return approximately 56% (excluding dividends, fees and charges).
Current consensus price target is $35.05, suggesting upside of 52.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 29.13 cents and EPS of 105.72 cents.
At the last closing share price the estimated dividend yield is 1.25%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 113.3, implying annual growth of N/A.
Current consensus DPS estimate is 30.5, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 20.3.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 30.79 cents and EPS of 125.09 cents.
At the last closing share price the estimated dividend yield is 1.32%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 127.1, implying annual growth of 12.2%.
Current consensus DPS estimate is 33.7, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 18.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SHV    SELECT HARVESTS LIMITED

Agriculture – Overnight Price: $4.36

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

Wilsons remains encouraged by the progress Select Harvests has made on various initiatives to improve earnings and cash flow. Crop volume guidance for 2023 has increased to 19,500t amid forecasts for a net sales price of $6.30-6.50/kg with 80% of the crop committed for sale.

It is too early to accurately assess the FY24 crop volume yet the broker observes operating conditions are now becoming more favourable. Overweight rating and $5.53 target retained.

This report was published on September 12, 2023.

Target price is $5.53 Current Price is $4.36 Difference: $1.17
If SHV meets the Wilsons target it will return approximately 27% (excluding dividends, fees and charges).
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 minus 78.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.55.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 15.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.42.

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

TIE    TIETTO MINERALS LIMITED

Gold & Silver – Overnight Price: $0.33

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

In assessing the gold sector, Petra Capital believes investors will continue to look to gold for risk diversification and as a currency alternative to the US dollar in uncertain times.

Cost pressures may be ongoing yet producers are making money and balance sheets are strong. While dividends might feature, the broker suspects it more likely cash will be used to fund corporate activity with a focus on domestic gold assets.

Tietto Minerals appears cheap on this basis and the broker retains a Buy rating and $0.64 target.

This report was published on September 8, 2023.

Target price is $0.64 Current Price is $0.33 Difference: $0.315
If TIE meets the Petra Capital target it will return approximately 97% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.67.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 0.00 cents and EPS of 5.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.37.

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

WGX    WESTGOLD RESOURCES LIMITED

Gold & Silver – Overnight Price: $1.78

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

Westgold Resources recently released its resource/reserve statement which showed an increase in resources to 8.25m ounces, its first increase since 2017.

In FY24 the company expects to spend -$25m on exploration and resource definition drilling, with a focus on converting to reserves that will feed into mine planning and mine life extensions.

In assessing the gold sector, Petra Capital believes investors will continue to look to gold for risk diversification and as a currency alternative to the US dollar in uncertain times.

Cost pressures may be ongoing yet producers are making money and balance sheets are strong. While dividends might feature, the broker suspects it more likely cash will be used to fund corporate activity with a focus on domestic gold assets.

Petra Capital believes the stock screens well against mid-cap peers and retains a Buy rating with a $2 target.

This report was published on September 12, 2023.

Target price is $2.00 Current Price is $1.78 Difference: $0.22
If WGX meets the Petra Capital target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 8.00 cents and EPS of 21.10 cents.
At the last closing share price the estimated dividend yield is 4.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.44.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 8.00 cents and EPS of 22.10 cents.
At the last closing share price the estimated dividend yield is 4.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.05.

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

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Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide experienced, intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface.

This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

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