Australian Broker Call *Extra* Edition – Oct 10, 2023

This story features ARISTOCRAT LEISURE LIMITED, and other companies. For more info SHARE ANALYSIS: ALL

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)

ALL   CSR   EMN   FPH   GNG   GT1   IEL   ORA   PXA   STX   TRJ  

ALL    ARISTOCRAT LEISURE LIMITED

Gaming – Overnight Price: $39.90

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

While current Aristocrat Leisure CEO Trevor Croker has been in position for seven years, the departure of Mike Lang, the CEO of Pixel United, is the fourth change in Aristocrat’s executive leadership team over the past 12-18 months, notes Jarden.

The recent departure highlights short-term earnings risk, and the broker expects FY23 segment profit for Pixel United will be moderately below the level reported for FY22, in local currency terms. 

Nonetheless, Jarden believes downside risk will be more than offset by market share gains across strong land-based gaming markets.

The Overweight rating and $41.90 target are maintained.

This report was published on October 6, 2023.

Target price is $41.90 Current Price is $39.90 Difference: $2
If ALL meets the Jarden target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $44.66, suggesting upside of 11.9%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 59.00 cents and EPS of 197.90 cents.
At the last closing share price the estimated dividend yield is 1.48%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 195.2, implying annual growth of 36.6%.
Current consensus DPS estimate is 64.1, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 20.4.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 69.00 cents and EPS of 197.90 cents.
At the last closing share price the estimated dividend yield is 1.73%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.16.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 210.1, implying annual growth of 7.6%.
Current consensus DPS estimate is 73.5, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 19.0.

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

CSR    CSR LIMITED

Building Products & Services – Overnight Price: $5.85

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

Goldman Sachs expects the existing building backlog could provide some through-the-cycle buffering to CSR. With dwellings under construction at historic levels, the broker is predicting completions increase to 187,000 and the current backlog will resolve itself by end of 2024. 

It expects completions to moderate in FY25 and trough in FY26, by which time a steady or lowering interest rate environment could yield an improved housing outlook. 

The rating is upgraded to Buy from Neutral and the target price increases $6.45 from $5.95. 

This report was published on October 8, 2023.

Target price is $6.45 Current Price is $5.85 Difference: $0.6
If CSR meets the Goldman Sachs target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $5.62, suggesting downside of -3.9%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 30.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 5.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 37.4, implying annual growth of -17.9%.
Current consensus DPS estimate is 28.0, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 15.6.

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 5.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.62.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.8, implying annual growth of -1.6%.
Current consensus DPS estimate is 27.2, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 15.9.

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

EMN    EURO MANGANESE INC

New Battery Elements – Overnight Price: $0.12

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

Having completed resubmission of its Environmental and Social Impact Assessment (ESIA) for its Chvaletice manganese project, Euro Manganese is now anticipating final ESIA approval within three months. 

Canaccord Genuity continues to find Euro Manganese a compelling exposure to the battery thematic. Over the coming nine months the broker expects to see completion of land access agreements, planning permit submissions, commencement of front end engineering design, offtake agreement and financing discussions, and potentially early works programs. 

The Speculative Buy rating and target price of $1.15 are retained.

This report was published on October 5, 2023.

Target price is $1.15 Current Price is $0.12 Difference: $1.035
If EMN meets the Canaccord Genuity target it will return approximately 900% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY22:

Canaccord Genuity forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.75.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.50.

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

FPH    FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED

Medical Equipment & Devices – Overnight Price: $20.41

Jarden rates ((FPH)) as Neutral (3) –

Jarden has renewed confidence in its growth forecast for Fisher & Paykel Healthcare, with the company shifting to a focus on rebuilding operating leverage and investing in growth. Key to targeted top-line growth, according to the broker, will be wider adoption of nasal high flow devices outside of the NICU. 

The broker points out, as a consequence of covid the company has placed a large base of devices into emergency departments and hospital wards, and now needs to improve utilisation through education. 

The Neutral rating and target price of NZ$23.00 are retained.

This report was published on October 5, 2023.

Current Price is $20.41. Target price not assessed.
Current consensus price target is $21.00, suggesting upside of 2.9%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 38.33 cents and EPS of 39.99 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 51.04.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.6, implying annual growth of N/A.
Current consensus DPS estimate is 35.3, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 50.3.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 39.25 cents and EPS of 53.75 cents.
At the last closing share price the estimated dividend yield is 1.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.97.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 51.4, implying annual growth of 26.6%.
Current consensus DPS estimate is 37.9, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 39.7.

This company reports in NZD. 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

GNG    GR ENGINEERING SERVICES LIMITED

Mining Sector Contracting – Overnight Price: $2.19

Taylor Collison rates ((GNG)) as Initiation of coverage with Outperform & Accumulate (2) –

Taylor Collison initiates coverage on engineering services contractor GR Engineering Services with an Outperform & Accumulate rating and $2.52 target. The company provides engineering, design and construction services to the mining and minerals processing industries.

These services range from pre-feasibility studies through to construction of mining infrastructure, and the broker points out margins are correlated to the long-term price of the minerals in which it specialises.

While only a small part of revenue is secured from pre-feasibility and feasibility studies, this specialty helps the company gain tendering of engineering, procurement, and construction (EPC) work against competitors, explains the analyst.

Given an expected long demand cycle for clean energy minerals, and its potential to provide consistent profits and high labour utilisation, the broker sees an attractive payback from investing in shares of GR Engineering Services.

This report was published on October 3, 2023.

Target price is $2.52 Current Price is $2.19 Difference: $0.33
If GNG meets the Taylor Collison target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 19.00 cents and EPS of 20.10 cents.
At the last closing share price the estimated dividend yield is 8.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.90.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 20.00 cents and EPS of 21.30 cents.
At the last closing share price the estimated dividend yield is 9.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.28.

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

GT1    GREEN TECHNOLOGY METALS LIMITED

New Battery Elements – Overnight Price: $0.41

Canaccord Genuity rates ((GT1)) as Speculative Buy (1) –

Having announced its acquisition of the Junior lithium project in early October, Green Technology Metals has now field work undertaken in recent months has identified hundreds of pegmatite outcrops. The company has revealed the magnetic signature bears similarities to some of its other deposits, and sees evidence of a possible stacked pegmatite or fertile intrusive system. 

Canaccord Genuity notes the company will undertake a 4km maiden diamond drilling campaign in the coming March quarter. The company will also undertake an 8km diamond drilling program at the North and South Aubry deposits at its Seymour project, with summer field exploration activities completed. 

The Speculative Buy rating and target price of $1.90 are retained.

This report was published on October 6, 2023.

Target price is $1.90 Current Price is $0.41 Difference: $1.49
If GT1 meets the Canaccord Genuity target it will return approximately 363% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.86.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 5.13.

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

IEL    IDP EDUCATION LIMITED

Education & Tuition – Overnight Price: $21.34

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

Goldman Sachs has made efforts to quantify IDP Education's exposure to current tensions between India and Canada, to give investors a better picture of how the situation may impact on company earnings.

For context, the broker estimates Indian students account for 50% of student volumes, but that the India-Canada route accounts for 17% of student placement volumes and 25% of IELTS volumes. 

The broker does, however, point out that IDP's diversified model allows Indian students to opt for placements in other Commonwealth countries should Canada become less desirable. The broker also does not expect Australian visa changes to have a material impact on IDP.

With the stock declining -13% since September, Goldman Sachs feels the share price is factoring in a bearish scenario. The Buy rating and target price of $29.65 are retained.

This report was published on October 9, 2023.

Target price is $29.65 Current Price is $21.34 Difference: $8.31
If IEL meets the Goldman Sachs target it will return approximately 39% (excluding dividends, fees and charges).
Current consensus price target is $27.79, suggesting upside of 30.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 45.00 cents and EPS of 64.00 cents.
At the last closing share price the estimated dividend yield is 2.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.34.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 62.3, implying annual growth of 16.8%.
Current consensus DPS estimate is 45.6, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 34.3.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 56.00 cents and EPS of 80.00 cents.
At the last closing share price the estimated dividend yield is 2.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 74.3, implying annual growth of 19.3%.
Current consensus DPS estimate is 53.5, implying a prospective dividend yield of 2.5%.
Current consensus EPS estimate suggests the PER is 28.7.

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

ORA    ORORA LIMITED

Paper & Packaging – Overnight Price: $2.77

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

Orora continues to progress towards a financial close on its acquisition of French glass bottlemaker Saverglass, remaining comitted to having the acquisition completed by the fourth quarter of 2023.

Having completed the French works council consultation process, the company is now able to enter into a binding share purchase agreement for the acquisition. 

Jarden feels that further demonstration that financial performance has continued to track throughout the business ownership transition, and better disclosure of a pathway to earnings margins improvement could restore some confidence in the acquisition and improve share price performance. 

The Overweight rating and target price of $3.30 are retained.

This report was published on October 4, 2023.

Target price is $3.30 Current Price is $2.77 Difference: $0.53
If ORA meets the Jarden target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $3.61, suggesting upside of 30.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 16.00 cents and EPS of 21.60 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 12.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.9, implying annual growth of 11.8%.
Current consensus DPS estimate is 17.4, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 12.1.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 18.90 cents and EPS of 25.20 cents.
At the last closing share price the estimated dividend yield is 6.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.0, implying annual growth of 9.2%.
Current consensus DPS estimate is 19.3, implying a prospective dividend yield of 7.0%.
Current consensus EPS estimate suggests the PER is 11.1.

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

PXA    PEXA GROUP LIMITED

Real Estate – Overnight Price: $10.35

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

Jarden likes Pexa Group’s all-cash $58.6m offer for UK-based Smoove (subject to conditions), as it secures a key player in the complex UK conveyancing process.

Even though management reconfirmed projected UK penetration rates, the broker remains cautious and retains its Underweight rating on concerns whether targets can be delivered on-time and/or within budget.

While Smoove's board has guided to a significant FY24 fall in cash burn, Jarden still forecasts earnings (EBITDA) losses for two years.

The broker’s target falls to $10.40 from $11.40 due partly to these losses and lower UK market share estimates. The Underweight rating is unchanged.

This report was published on October 6, 2023.

Target price is $10.40 Current Price is $10.35 Difference: $0.05
If PXA meets the Jarden target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $14.53, suggesting upside of 40.4%(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 29.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 35.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 31.3, 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 33.1.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 51.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.6, implying annual growth of 36.1%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 24.3.

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

STX    STRIKE ENERGY LIMITED

NatGas – Overnight Price: $0.42

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

Management at Strike Energy have successfully reached target in the South Erregulla-2 (SE-2) appraisal well and have confirmed the extension of the gas field from South Erregulla-1 (SE-1) at the Walyering gas field, in the onshore Perth Basin.

Porosities of 11% (and up to 18%) is a good outcome, according to Wilsons. As a result, this interval is now expected to flow gas at high rates when production flow testing occurs in either November or December.

Success at SE-2 now reduces risk for SE-3 and exploration well Southwest Erregulla-1, points out the broker.

The Overweight rating and 52c target are maintained.

This report was published on October 6, 2023.

Target price is $0.52 Current Price is $0.42 Difference: $0.095
If STX meets the Wilsons target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $0.54, suggesting upside of 27.1%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 85.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.5, 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 85.0.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.5, implying annual growth of 200.0%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 28.3.

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

TRJ    TRAJAN GROUP HOLDINGS LIMITED

Medical Equipment & Devices – Overnight Price: $1.21

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

Trajan Group has provided additional detail around difficult trading conditions expected to impact on results in the first half. The company expects customer destocking will continue to negatively impact sales into the second quarter, but anticipates growth in the second half. 

Canaccord Genuity is anticipating only modest gains in operating leverage unless the company pursues merger and acquisition activity, which it feels could drive material improvement to the earnings margin from 13.5% to above 20.0%. 

The Buy rating is retained and the target price decreases to $2.25 from $2.30.

This report was published on October 6, 2023.

Target price is $2.25 Current Price is $1.21 Difference: $1.04
If TRJ meets the Canaccord Genuity target it will return approximately 86% (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 5.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.73.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 9.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.47.

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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