Weekly Reports | Nov 03 2023
This story features BEACH ENERGY LIMITED, and other companies. For more info SHARE ANALYSIS: BPT
Broker Rating Changes (Post Thursday Last Week)
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BEACH ENERGY LIMITED ((BPT)) Upgrade to Hold from Sell by Canaccord Genuity.B/H/S: 0/0/0
Despite Beach Energy's September quarter production of 4.5m barrels of oil equivalent missing Canaccord Genuity's expectations, the broker has lifted its full year production forecast.
As per Canaccord Genuity, the production miss was driven by lower nominations from Otway, and while both Otway and Waitsia remain of concern to the broker, the valuation case and potential higher commodity prices supported a rating upgrade.
The rating is upgraded to Hold from Sell and the target price increases to $1.54 from $1.50.
PILBARA MINERALS LIMITED ((PLS)) Upgrade to Buy from Sell by Jarden.B/H/S: 0/0/0
Jarden increases the target price for Pilbara Minerals to $4.70 from $3.32 and upgrades by four notches in its ratings system to Buy from Sell.
The company is now the preferred ASX-listed lithium exposure under the broker’s coverage.
These changes flow from the analysts embedding further capacity expansions into forecasts for the 100%-owned Pilgangoora project, the third largest hard rock lithium deposit globally.
Management recently released increased resource and reserve estimates for the project.
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CODAN LIMITED ((CDA)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0
Codan's metal detection sales exceeded expectations to date, and Moelis expects strong first half metal detection sales guidance is reflective of ongoing strength in company's new coin and treasure products.
The broker lifts its metal detection sales 7%, reflecting the strong sales performance to date, and expects segment earnings to grow around 20% over the full year.
The rating is downgraded to Hold from Buy and the target price increases to $8.25 from $8.10.
LIONTOWN RESOURCES LIMITED ((LTR)) Downgrade to Sell from Underweight by Jarden.B/H/S: 0/0/0
Jarden downgrades its rating for Liontown Resources to Sell from Underweight and slashes the target price to $1.40 from $3.00 after Albemarle dropped its $3.00/share takeover bid.
The company also announced a funding package comprising debt of $760m, $376m in new equity at an issue price of $1.80/share and an share purchase plan (SPP) of up to $42m.
Following these funding changes, Jarden now assumes an interest rate of 7.5% across all outstanding debt compared to 5.5% previously, resulting in an increase in weighted average cost of capital (WACC) to 11.2% from 10.7%.
NEXT SCIENCE LIMITED ((NXS)) Downgrade to Speculative Buy from Buy by Canaccord Genuity.B/H/S: 0/0/0
Following its recent capital raising, Next Science has issued a substantial downgrade to its second half guidance alongside its third quarter result, with revenue down -23% at the midpoint.
Canaccord Genuity points out new guidance still suggests strong revenue growth in the final period.
In its third quarter, quarterly revenue increases 60% year-on-year, despite being down -10% quarter on quarter, while gross margins recovered to 75%. The broker expects margins to be maintained moving forward.
The rating is downgraded to Speculative Buy from Buy and the target price decreases to 40 cents from 60 cents.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | BEACH ENERGY LIMITED | Neutral | Neutral | Canaccord Genuity | |
| 2 | PILBARA MINERALS LIMITED | Buy | Sell | Jarden | |
| Downgrade | |||||
| 3 | CODAN LIMITED | Neutral | Buy | Moelis | |
| 4 | LIONTOWN RESOURCES LIMITED | Sell | Sell | Jarden | |
| 5 | NEXT SCIENCE LIMITED | Buy | Buy | Canaccord Genuity | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| 29M | 29Metals | $0.64 | Canaccord Genuity | 0.57 | 1.30 | -56.15% |
| Jarden | 0.82 | 0.80 | 2.50% | |||
| BPT | Beach Energy | $1.54 | Canaccord Genuity | 1.54 | 1.56 | -1.28% |
| CDA | Codan | $8.06 | Moelis | 8.25 | 8.10 | 1.85% |
| CMM | Capricorn Metals | $4.68 | Goldman Sachs | 4.15 | 4.40 | -5.68% |
| Jarden | 4.89 | 4.92 | -0.61% | |||
| COE | Cooper Energy | $0.09 | Jarden | 0.20 | 0.21 | -4.76% |
| CXL | Calix | $3.06 | Canaccord Genuity | 7.70 | 10.50 | -26.67% |
| EVS | EnviroSuite | $0.06 | Wilsons | 0.13 | 0.16 | -18.75% |
| LRK | Lark Distilling Co | $1.48 | Moelis | 1.69 | 1.75 | -3.43% |
| LTR | Liontown Resources | $1.64 | Jarden | 1.40 | 3.00 | -53.33% |
| LYC | Lynas Rare Earths | $7.23 | Goldman Sachs | 7.10 | 6.50 | 9.23% |
| Goldman Sachs | 7.50 | 6.50 | 15.38% | |||
| MAY | Melbana Energy | $0.06 | Petra Capital | 0.21 | 0.20 | 5.00% |
| MIN | Mineral Resources | $61.57 | Goldman Sachs | 51.00 | 53.00 | -3.77% |
| Jarden | 50.30 | 47.30 | 6.34% | |||
| MPL | Medibank Private | $3.45 | Jarden | 3.75 | 3.80 | -1.32% |
| NHF | nib Holdings | $7.34 | Jarden | 8.00 | 8.10 | -1.23% |
| NXD | NextEd Group | $0.79 | Canaccord Genuity | 1.20 | 2.00 | -40.00% |
| NXS | Next Science | $0.26 | Canaccord Genuity | 0.40 | 0.60 | -33.33% |
| PBH | PointsBet Holdings | $0.76 | Jarden | 0.94 | 0.90 | 4.44% |
| PLS | Pilbara Minerals | $3.83 | Canaccord Genuity | 5.00 | 5.10 | -1.96% |
| Jarden | 4.70 | 3.42 | 37.43% | |||
| PLT | Plenti Group | $0.35 | Wilsons | 0.90 | 1.10 | -18.18% |
| PME | Pro Medicus | $80.98 | Moelis | 79.06 | 72.19 | 9.52% |
| PRU | Perseus Mining | $1.70 | Canaccord Genuity | 2.30 | 2.35 | -2.13% |
| REG | Regis Healthcare | $2.50 | Jarden | 2.87 | 2.95 | -2.71% |
| RGN | Region Group | $2.09 | Moelis | 2.66 | 2.67 | -0.37% |
| SUL | Super Retail | $13.38 | Wilsons | 12.70 | 12.00 | 5.83% |
| SVR | Solvar | $1.10 | Canaccord Genuity | 1.55 | 2.70 | -42.59% |
| WGX | Westgold Resources | $2.13 | Canaccord Genuity | 2.20 | 2.15 | 2.33% |
| WHC | Whitehaven Coal | $7.35 | Goldman Sachs | 7.50 | 7.10 | 5.63% |
| WOW | Woolworths Group | $35.43 | Goldman Sachs | 42.40 | 42.00 | 0.95% |
| Jarden | 42.60 | 43.10 | -1.16% | |||
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
AND ANSARADA GROUP LIMITED
Software & Services – Overnight Price: $1.43
Canaccord Genuity rates ((AND)) as Buy (1) –
Following a 1Q run-rate for revenue ahead of Canaccord Genuity's 1H forecast, the broker believes Ansarada Group is in the early stages of an earnings upgrade cycle.
The broker expects future revenue growth given deferred revenue increased by 10% quarter-on-quarter to $18.6m and is now at record levels. Growth for customer additions in the quarter illustrates latent demand for the company's platform, in the analysts' view.
Strong earnings leverage into FY25 is likely, according to Canaccord, thanks not only to deferred revenue but also price rises in October and ongoing growth in active customers.
The Buy rating and $2.00 target are maintained.
This report was published on October 25, 2023.
Target price is $2.00 Current Price is $1.43 Difference: $0.57
If AND meets the Canaccord Genuity target it will return approximately 40% (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 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 68.10.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 5.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.48.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
HLO HELLOWORLD TRAVEL LIMITED
Travel, Leisure & Tourism – Overnight Price: $2.26
Jarden rates ((HLO)) as Overweight (2) –
Jarden feels reiteration of FY24 guidance by Helloworld Travel is conservative given a “strong” 1Q with year-on-year rises in total transaction value (TTV) and earnings (EBITDA) of 120% and 216%, respectively.
Management’s outlook commentary was positive, in the analysts’ view, with logistics expected to deliver 25-30% revenue growth in FY24.
Despite signs of moderating demand for travel, the broker feels the company's shares deserve a higher valuation multiple given exposure to wealthy baby boomers customers, M&A potential and an improving return on invested capital (ROIC) metric.
The Overweight rating and $4.05 target are retained.
This report was published on October 24, 2023.
Target price is $4.05 Current Price is $2.26 Difference: $1.79
If HLO meets the Jarden target it will return approximately 79% (excluding dividends, fees and charges).
Current consensus price target is $3.71, suggesting upside of 61.3%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Jarden forecasts a full year FY24 EPS of 23.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.70.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 21.3, implying annual growth of 90.0%.
Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 10.8.
Forecast for FY25:
Jarden forecasts a full year FY25 EPS of 28.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.07.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 26.5, implying annual growth of 24.4%.
Current consensus DPS estimate is 12.8, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 8.7.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LTR LIONTOWN RESOURCES LIMITED
New Battery Elements – Overnight Price: $1.64
Jarden rates ((LTR)) as Downgrade to Sell from Underweight (5) –
Jarden downgrades its rating for Liontown Resources to Sell from Underweight and slashes the target price to $1.40 from $3.00 after Albemarle dropped its $3.00/share takeover bid.
The company also announced a funding package comprising debt of $760m, $376m in new equity at an issue price of $1.80/share and an share purchase plan (SPP) of up to $42m.
Following these funding changes, Jarden now assumes an interest rate of 7.5% across all outstanding debt compared to 5.5% previously, resulting in an increase in weighted average cost of capital (WACC) to 11.2% from 10.7%.
This report was published on October 24, 2023.
Target price is $1.40 Current Price is $1.64 Difference: minus $0.24 (current price is over target).
If LTR meets the Jarden target it will return approximately minus 15% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $2.35, suggesting upside of 40.4%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Jarden forecasts a full year FY24 EPS of minus 3.65 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 44.93.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is -1.6, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.
Forecast for FY25:
Jarden forecasts a full year FY25 EPS of 12.04 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.62.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 9.0, 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 18.6.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LYC LYNAS RARE EARTHS LIMITED
Rare Earth Minerals – Overnight Price: $7.07
Canaccord Genuity rates ((LYC)) as Buy (1) –
Lynas Rare Earths has been granted a two year extension to its operating license from the Malaysian government, meaning the company will be able to continue importing and processing concentrate from Mt Weld until March 2026.
Canaccord Genuity considers the key short-term benefit of this as alleviating pressure on the Kalgoorlie ramp up. The broker estimate with Kalgoorlie at full run rate, Lynas Rare Earths will have mid-stream cracking and leaching capacity of 15,000 tonnes per annum.
However, the broker sees the ability to increase production as limited by the company's separation and finishing capacity.
The Buy rating and target price of $8.50 are retained.
This report was published on October 26, 2023.
Target price is $8.50 Current Price is $7.07 Difference: $1.43
If LYC meets the Canaccord Genuity target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $8.33, suggesting upside of 16.4%(ex-dividends)
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 7.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 101.00.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 21.4, implying annual growth of -37.2%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 33.4.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 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 141.40.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 55.6, implying annual growth of 159.8%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 12.9.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TNE TECHNOLOGY ONE LIMITED
IT & Support – Overnight Price: $14.79
Goldman Sachs rates ((TNE)) as Buy (1) –
Goldman Sachs reiterates its Buy rating heading into the company's FY23 result, believing the company has reached an earnings inflection point not reflected yet in its valuation.
Target price is steady at $18.30. The broker observes despite the underlying growth outlook improving, the shares have actually de-rated in recent months.
This report was published on October 25, 2023.
Target price is $18.30 Current Price is $14.79 Difference: $3.51
If TNE meets the Goldman Sachs target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $15.28, suggesting upside of 3.0%(ex-dividends)
The company's fiscal year ends in September.
Forecast for FY23:
Goldman Sachs forecasts a full year FY23 dividend of 19.40 cents and EPS of 31.20 cents.
At the last closing share price the estimated dividend yield is 1.31%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.40.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 30.8, implying annual growth of 12.0%.
Current consensus DPS estimate is 18.2, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 48.1.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 23.50 cents and EPS of 37.80 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.13.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 34.9, implying annual growth of 13.3%.
Current consensus DPS estimate is 20.6, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 42.5.
Market Sentiment: 0.0
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: BPT - BEACH ENERGY LIMITED
For more info SHARE ANALYSIS: CDA - CODAN LIMITED
For more info SHARE ANALYSIS: LTR - LIONTOWN RESOURCES LIMITED
For more info SHARE ANALYSIS: NXS - NEXT SCIENCE LIMITED
For more info SHARE ANALYSIS: PLS - PILBARA MINERALS LIMITED