Weekly Reports | Oct 27 2023
This story features 29METALS LIMITED, and other companies. For more info SHARE ANALYSIS: 29M
Broker Rating Changes (Post Thursday Last Week)
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29METALS LIMITED ((29M)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden returns from research restriction on 29Metals with an Overweight rating and upgrades the target price to 80c from 71c.
The broker says everything has changed for the company following the derisking of its balance sheet and upgraded cash flow and earnings forecasts.
Jarden shaves its 2023 and 2024 copper price forecasts but expects strong growth in the company's copper and zinc volumes now capital constraints have been removed.
The broker forecasts a four-year compound annual growth rate in copper production of 6%.
LIONTOWN RESOURCES LIMITED ((LTR)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
After Albemarle dropped its $3.00 per share bid, and Liontown Resources raised $376m equity at $1.80 per share, Wilsons responds by lowering its target to $2.30 from $2.90 and upgrades its rating to Overweight from Underweight.
The company also announced a $760m committed debt facility, which included the refinancing of a pre-existing $300m debt facility.
While the equity raise was greater than the analysts had anticipated, it provides an around $350m liquidity and cost overrun buffer. Only eight months away from commissioning, the Kathleen Valley project is now considered heavily de-risked.
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HUB24 LIMITED ((HUB)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
From a quarterly update from Hub24, the company's core net fund flows exceeded Wilsons' expectations at $2.8bn compared to an expected $2.3bn, while a record number of new distribution agreements were also signed in the period.
Despite positives, the $4bn Equity Holdings ((EQT)) transition is expected to commence in the third quarter, with a majority to impact on the second half.
With the share price having lifted 40% since Wilsons' initiation, the broker's enthusiasm is tempered driving a rating downgrade. The rating is downgraded to Market Weight from Overweight and the target price decreases to $33.66 from $34.81.
JANISON EDUCATION GROUP LIMITED ((JAN)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
Poor results in ICAS and PBTS assessments continue to weigh on Janison Education's growth outlook, says Wilsons.
With the annual ICAS period largely concluded, the broker is left disappointed by lower margin testing despite school conditions largely normalising.
While more encouraged by performance in the core assessment platform, Wilsons feels these results have been dragged down by legacy contracts.
The rating is downgraded to Market Weight from Overweight and the target price decreases to 30 cents from 61 cents.
JAMES HARDIE INDUSTRIES PLC ((JHX)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden expects James Hardie Industries will deliver on December-quarter guidance but sees no room for upside given the weak US housing market and expects consumers will hold off on renovations and extensions.
The broker shaves June-half and FY25 margin forecasts to reflect low activity, a less favourable product mix (as builders shift to cheaper products) and freight costs.
Jarden now sits -8.7% below FY25 consensus forecasts. The broker suspects a softening economy could augur a further deterioration and observes the company is trading at the highest multiples of all building materials companies under its coverage (partly a reflection on its quality).
Rating is downgraded to Neutral from Overweight. Target price falls to $45.20 from $48.60.
NEXT SCIENCE LIMITED ((NXS)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
Two months after providing guidance and raising capital, notes Wilsons, Next Science has slashed 2H revenue expectations by -25%, while presenting 3Q results. Underperformance by the durable medical equipment (DME) business was the culprit.
Revenue of US$5m in the quarter missed the analysts' expectation by -US$2.1m. The company expects positive earnings (EBITDA) in the 2H of FY24.
The analysts feel the market is incorporating the need for a capital raise (at some point) into the current share price.
In reaction to this overall results disappointment, the broker downgrades its rating to Market Weight from Overweight and halves the target price to 29c.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | 29METALS LIMITED | Buy | Neutral | Jarden | |
| 2 | LIONTOWN RESOURCES LIMITED | Buy | Neutral | Wilsons | |
| Downgrade | |||||
| 3 | HUB24 LIMITED | Neutral | Buy | Wilsons | |
| 4 | JAMES HARDIE INDUSTRIES PLC | Neutral | Buy | Jarden | |
| 5 | JANISON EDUCATION GROUP LIMITED | Neutral | Buy | Wilsons | |
| 6 | NEXT SCIENCE LIMITED | Neutral | Buy | Wilsons | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| 29M | 29Metals | $0.58 | Jarden | 0.80 | 0.71 | 12.68% |
| A11 | Atlantic Lithium | $0.41 | Canaccord Genuity | 1.40 | N/A | – |
| Wilsons | 0.95 | 1.10 | -13.64% | |||
| ALG | Ardent Leisure | $0.48 | Canaccord Genuity | 0.65 | 0.80 | -18.75% |
| ARB | ARB Corp | $30.15 | Wilsons | 35.30 | 35.88 | -1.62% |
| BHP | BHP Group | $45.02 | Goldman Sachs | 46.50 | 46.10 | 0.87% |
| BSL | BlueScope Steel | $18.74 | Goldman Sachs | 21.60 | 23.70 | -8.86% |
| Jarden | 24.50 | 25.30 | -3.16% | |||
| CCP | Credit Corp | $12.01 | Canaccord Genuity | 13.20 | 21.70 | -39.17% |
| CGF | Challenger | $5.88 | Goldman Sachs | 7.05 | 6.89 | 2.32% |
| Jarden | 7.25 | 7.35 | -1.36% | |||
| CIP | Centuria Industrial REIT | $2.84 | Moelis | 3.52 | 3.62 | -2.76% |
| CNB | Carnaby Resources | $0.74 | Petra Capital | 1.50 | 1.89 | -20.63% |
| COE | Cooper Energy | $0.10 | Canaccord Genuity | 0.25 | 0.29 | -13.79% |
| COI | Comet Ridge | $0.17 | Petra Capital | 0.38 | 0.42 | -9.52% |
| CTD | Corporate Travel Management | $16.35 | Goldman Sachs | 20.50 | 21.60 | -5.09% |
| CWY | Cleanaway Waste Management | $2.28 | Goldman Sachs | 2.70 | 2.80 | -3.57% |
| EVN | Evolution Mining | $3.53 | Canaccord Genuity | 4.00 | 4.20 | -4.76% |
| Goldman Sachs | 3.80 | 3.70 | 2.70% | |||
| Jarden | 3.11 | 3.17 | -1.89% | |||
| EVT | EVT Ltd | $10.28 | Jarden | 12.46 | 12.54 | -0.64% |
| EXP | Experience Co | $0.21 | Canaccord Genuity | 0.33 | 0.34 | -2.94% |
| FMG | Fortescue Metals | $22.15 | Goldman Sachs | 16.20 | 13.80 | 17.39% |
| GDG | Generation Development | $1.55 | Moelis | 1.97 | 1.88 | 4.79% |
| GOZ | Growthpoint Properties Australia | $2.09 | Moelis | 3.43 | 3.69 | -7.05% |
| HDN | HomeCo Daily Needs REIT | $1.06 | Moelis | 1.35 | 1.43 | -5.59% |
| HUB | Hub24 | $30.30 | Jarden | 31.90 | 32.00 | -0.31% |
| Wilsons | 33.66 | 34.81 | -3.30% | |||
| ILU | Iluka Resources | $7.33 | Canaccord Genuity | 7.00 | 11.00 | -36.36% |
| Goldman Sachs | 10.80 | 11.20 | -3.57% | |||
| IMD | Imdex | $1.65 | Canaccord Genuity | 2.10 | 2.86 | -26.57% |
| INA | Ingenia Communities | $3.81 | Goldman Sachs | 4.30 | 4.20 | 2.38% |
| JAN | Janison Education | $0.26 | Wilsons | 0.30 | 0.61 | -50.82% |
| JHX | James Hardie Industries | $39.11 | Jarden | 45.20 | 48.60 | -7.00% |
| KLS | Kelsian Group | $6.10 | Canaccord Genuity | 7.60 | 7.80 | -2.56% |
| LRK | Lark Distilling Co | $1.35 | Moelis | 1.75 | 1.70 | 2.94% |
| LTR | Liontown Resources | $1.73 | Wilsons | 2.30 | 2.90 | -20.69% |
| LYC | Lynas Rare Earths | $7.11 | Canaccord Genuity | 8.50 | 10.50 | -19.05% |
| Goldman Sachs | 7.10 | 6.50 | 9.23% | |||
| MFG | Magellan Financial | $6.33 | Jarden | 7.45 | 8.90 | -16.29% |
| MYX | Mayne Pharma | $3.84 | Wilsons | 3.20 | 2.68 | 19.40% |
| NCK | Nick Scali | $10.87 | Jarden | 10.30 | 9.70 | 6.19% |
| Wilsons | 11.30 | 12.20 | -7.38% | |||
| NST | Northern Star Resources | $11.82 | Canaccord Genuity | 13.95 | 15.05 | -7.31% |
| Goldman Sachs | 11.60 | 11.80 | -1.69% | |||
| NWL | Netwealth Group | $12.40 | Jarden | 13.80 | 14.00 | -1.43% |
| Wilsons | 15.38 | 16.29 | -5.59% | |||
| NXS | Next Science | $0.21 | Wilsons | 0.29 | 0.57 | -49.12% |
| ORA | Orora | $2.48 | Goldman Sachs | 3.92 | 4.20 | -6.67% |
| PLS | Pilbara Minerals | $3.94 | Canaccord Genuity | 5.10 | 5.70 | -10.53% |
| PMT | Patriot Battery Metals | $1.26 | Canaccord Genuity | N/A | 1.95 | -100.00% |
| PNI | Pinnacle Investment Management | $7.59 | Wilsons | 11.40 | 12.30 | -7.32% |
| PPS | Praemium | $0.56 | Canaccord Genuity | 1.20 | 1.15 | 4.35% |
| Moelis | 0.93 | 0.92 | 1.09% | |||
| Wilsons | 0.86 | 0.89 | -3.37% | |||
| QOR | Qoria | $0.19 | Wilsons | 0.37 | 0.36 | 2.78% |
| RDY | ReadyTech Holdings | $3.59 | Jarden | 3.65 | 3.89 | -6.17% |
| RED | Red 5 | $0.32 | Canaccord Genuity | 0.32 | 0.26 | 23.08% |
| Petra Capital | 0.40 | 0.34 | 17.65% | |||
| RIO | Rio Tinto | $117.20 | Goldman Sachs | 126.50 | 126.90 | -0.32% |
| RWC | Reliance Worldwide | $3.54 | Goldman Sachs | 4.35 | 4.50 | -3.33% |
| S32 | South32 | $3.30 | Goldman Sachs | 3.20 | 3.50 | -8.57% |
| SGF | SG Fleet | $2.46 | Canaccord Genuity | 3.43 | 3.51 | -2.28% |
| SMR | Stanmore Resources | $3.95 | Petra Capital | 5.15 | 5.38 | -4.28% |
| STO | Santos | $7.80 | Jarden | 7.95 | 8.05 | -1.24% |
| TIE | Tietto Minerals | $0.41 | Petra Capital | 0.73 | 0.66 | 10.61% |
| TLX | Telix Pharmaceuticals | $8.66 | Jarden | 12.69 | 12.99 | -2.31% |
| VIT | Vitura Health | $0.35 | Petra Capital | 0.70 | 0.67 | 4.48% |
| WDS | Woodside Energy | $34.86 | Jarden | 34.90 | 35.00 | -0.29% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
GDG GENERATION DEVELOPMENT GROUP LIMITED
Wealth Management & Investments – Overnight Price: $1.55
Moelis rates ((GDG)) as Buy (1) –
Moelis assesses strong 1Q investment bond flows for Generation Development, with superannuation changes expected to provide a further tailwind from the 2H.
Momentum may be building from recent investments in product and distribution, suggests the broker. A 10% increase in active financial advisers was announced at recent FY23 results.
Lonsec recorded around $100m per month net funds under management (FUM) growth across the 1Q, down from the around $200m per month in the 4Q of FY23.
The analyst attributes the fall in FUM to both absolute market performance and investor preference shifting to cash-like exposures.
Investment bond flows should remain strong across FY24, according to management, supported by growing inbound interest related to the proposed tax changes to superannuation.
Moelis retains a Buy rating and $1.97 target, after increasing the FY24 profit forecast by only 1% due to the stronger bond inflows.
This report was published on October 24, 2023.
Target price is $1.97 Current Price is $1.55 Difference: $0.42
If GDG meets the Moelis target it will return approximately 27% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Moelis forecasts a full year FY24 dividend of 2.30 cents and EPS of 5.60 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 27.68.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 2.80 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 1.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.46.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
HDN HOMECO DAILY NEEDS REIT
REITs – Overnight Price: $1.07
Moelis rates ((HDN)) as Buy (1) –
Consumer spending on furniture and household equipment has declined -12% year-on-year as of August, with Moelis describing the recent weakness in household goods retail as potential "early signs the consumer is starting to crack".
The broker points out HomeCo Daily Needs REIT may be so far insulated from this given its better quality centres, but sees downside risk ahead and will be paying close attention to tenant quarterlies.
Despite this, Moelis finds HomeCo Daily Needs REIT a compelling investment, largely driven by its development pipeline. The Buy rating is retained and the target price decreases to $1.35 from $1.43.
This report was published on October 18, 2023.
Target price is $1.35 Current Price is $1.07 Difference: $0.28
If HDN meets the Moelis target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $1.33, suggesting upside of 24.1%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Moelis forecasts a full year FY24 dividend of 8.30 cents and EPS of 8.60 cents.
At the last closing share price the estimated dividend yield is 7.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.44.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 8.7, implying annual growth of 76.1%.
Current consensus DPS estimate is 8.2, implying a prospective dividend yield of 7.7%.
Current consensus EPS estimate suggests the PER is 12.3.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 8.30 cents and EPS of 8.80 cents.
At the last closing share price the estimated dividend yield is 7.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.16.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 9.0, implying annual growth of 3.4%.
Current consensus DPS estimate is 8.7, implying a prospective dividend yield of 8.1%.
Current consensus EPS estimate suggests the PER is 11.9.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MAQ MACQUARIE TECHNOLOGY GROUP LIMITED
Telecommunication – Overnight Price: $62.86
Petra Capital rates ((MAQ)) as Initiation of coverage with Buy (1) –
Petra Capital sees Macquarie Technology's Macquarie Park as already being "well advanced as a global destination for data centre traffic", while the IC3 Super West facilty, expected to gain development approval later this year, could provide a material earnings lift from FY27.
The broker considers Macquarie Technology a multi-year growth story, expecting the company will benefit from ongoing structural tailwinds that include a move to digitilisation and increasing data usage.
The broker initiates with a Buy rating and a target price of $77.50.
This report was published on October 18, 2023.
Target price is $77.50 Current Price is $62.86 Difference: $14.64
If MAQ meets the Petra Capital target it will return approximately 23% (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 108.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 58.04.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 124.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 50.45.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PME PRO MEDICUS LIMITED
Medical Equipment & Devices – Overnight Price: $75.86
Goldman Sachs rates ((PME)) as Buy (1) –
Pro Medicus has signed a $16m, 8-year contract with South Shore Health, a not-for-profit, and largest independent health system in Southeastern Massachusetts, USA.
Goldman Sachs explains as is typical, the contract is based on a transactional licensing model for Visage 7 (including Workflow and Archive), and the contract is expected to go live in the first half of 2024.
The broker reminds investors South Shore Health's is the third new contract in FY24, and the sixth in 2023. It is considered indicative of Visage finding its way inside smaller institutions.
Pro Medicus is seen as the "clear incumbent technology leader in a growth market with low-risk market share upside", with optionalities, and Goldman Sachs reiterates its Buy rating. Price target unchanged at $88.
This report was published on October 23, 2023.
Target price is $88.00 Current Price is $75.86 Difference: $12.14
If PME meets the Goldman Sachs target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $63.88, suggesting downside of -15.8%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 40.00 cents and EPS of 78.00 cents.
At the last closing share price the estimated dividend yield is 0.53%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 97.26.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 76.3, implying annual growth of 31.3%.
Current consensus DPS estimate is 38.6, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 99.4.
Forecast for FY25:
Goldman Sachs forecasts a full year FY25 dividend of 53.00 cents and EPS of 102.00 cents.
At the last closing share price the estimated dividend yield is 0.70%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 74.37.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 99.5, implying annual growth of 30.4%.
Current consensus DPS estimate is 49.8, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 76.2.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SMR STANMORE RESOURCES LIMITED
Coal – Overnight Price: $3.63
Petra Capital rates ((SMR)) as Buy (1) –
Petra Capital spotted another strong operating performance from Stanmore Resources in its September quarter, with saleable coal production exceeding the broker's expectations by 7%. Petra Capital expects the upper end of guidance is easily achieveable.
Given strengthening coking coal prices and lower operating costs, the broker expects cash will continue to build and allow Stanmore Resources flexibility to either pursue accretive merger and acquisitoin opportunities, or pay out higher dividends.
The Buy rating is retained and the target price increases to $5.15 from $4.56.
This report was published on October 18, 2023.
Target price is $5.15 Current Price is $3.63 Difference: $1.52
If SMR meets the Petra Capital target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Petra Capital forecasts a full year FY23 dividend of 23.33 cents and EPS of 102.51 cents.
At the last closing share price the estimated dividend yield is 6.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.54.
Forecast for FY24:
Petra Capital forecasts a full year FY24 dividend of 28.90 cents and EPS of 105.37 cents.
At the last closing share price the estimated dividend yield is 7.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 3.44.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TIE TIETTO MINERALS LIMITED
Gold & Silver – Overnight Price: $0.41
Petra Capital rates ((TIE)) as Buy (1) –
With an improved operating environment emerging for Tietto Minerals, Petra Capital feels the company is positioned for an upturn.
The broker finds Tietto Minerals to have a strong balance sheet, alongside cash and bullion of $45.3m, while producing at positive free cash flow.
While year-to-date production has disappointed, Petra Capital is expecting additional diggers now on site to see contractor tonnage increase, and for stockpiles to be built up over the dry season.
The Buy rating is retained and the target price increases to 73 cents from 66 cents.
This report was published on October 18, 2023.
Target price is $0.73 Current Price is $0.41 Difference: $0.32
If TIE meets the Petra Capital target it will return approximately 78% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Petra Capital forecasts a full year FY23 dividend of 0.00 cents and EPS of 1.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.27.
Forecast for FY24:
Petra Capital forecasts a full year FY24 dividend of 0.00 cents and EPS of 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.13.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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CHARTS
For more info SHARE ANALYSIS: 29M - 29METALS LIMITED
For more info SHARE ANALYSIS: EQT - EQT HOLDINGS LIMITED
For more info SHARE ANALYSIS: HUB - HUB24 LIMITED
For more info SHARE ANALYSIS: JAN - JANISON EDUCATION GROUP LIMITED
For more info SHARE ANALYSIS: JHX - JAMES HARDIE INDUSTRIES PLC
For more info SHARE ANALYSIS: LTR - LIONTOWN RESOURCES LIMITED
For more info SHARE ANALYSIS: NXS - NEXT SCIENCE LIMITED