Weekly Reports | Nov 17 2023
This story features JANUS HENDERSON GROUP PLC, and other companies. For more info SHARE ANALYSIS: JHG
Broker Rating Changes (Post Thursday Last Week)
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JANUS HENDERSON GROUP PLC ((JHG)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Janus Henderson's third quarter earnings per share have far surpassed Jarden's expectations, despite continued outflows, helped by stronger management fee margins and robust cost management.
The company's board approved a $150m buyback, leaving Janus Henderson with the option to pursue capital management. Jarden remains cautious on near-term flows given weaker fund performance, expecting the company to suffer outflows for up to a further two years.
The rating is upgraded to Neutral from Underweight and the target price increases to $39.70 from $37.05.
WESTPAC BANKING CORPORATION ((WBC)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Jarden has described Westpac's full year result as "better-than-feared", and highlighted capital is tracking better. The bank announced a $1.5m buyback to be completed over the next six months, and the broker sees potential for further capital management over the year.
The broker was looking for early signs of a multi-year turnaround from the bank, and with the bank signalling its CORE program is now largely complete it is expected to begin the four plus year process of investing to simplify.
The rating is upgraded to Neutral from Underweight and the target price increases to $21.60 from $21.40.
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CSR LIMITED ((CSR)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Following CSR's below-consensus 1H results, Jarden downgrades to Neutral from Overweight on peak profitability for the Building Products division, and an uncertain medium and longer-term outlook for the Aluminium business.
A recent share price rally was also taken into account for the ratings downgrade.
The target price rises to $6.00 from $5.70 on higher forecasts for Building Products after record earnings (EBIT) and margins for the half.
The timing of contractual Property profits was delayed and there were greater Aluminium losses than the analysts expected. Jarden would have a more positive view of CSR should the Aluminium business be sold.
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INTEGRAL DIAGNOSTICS LIMITED ((IDX)) Downgrade to Neutral from Overweight by Jarden and Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
Integral Diagnostics' Q1 update surprised negatively with growth lagging the market, labour costs pressuring margins and with higher-than-anticipated D&A and non-interest expenses.
Jarden bemoans the absence of the operating leverage that was flagged by management to continue into FY24. The broker reminds investors yesterday's update follows on from the market update that occurred on August 28.
Not exactly evidence management has everything under control and is capable of predicting where things are heading internally. We are paraphrasing now, but such is the sentiment inside Jarden's response.
The former paragraph also explains why the broker has pulled back to Neutral from Overweight. Target tumbles to $2.58 from $3.23. Estimates have been culled.
Wilsons had upgraded to Overweight following Integral Diagnostics' FY23 release, confident things were turning around for the medical imaging services business, but then followed the reality check, and that move has now been reversed.
The price target falls by -41% to $2. Needless to say, the broker is not happy, labeling it "the company’s most perplexing downgrade yet".
Wilsons sees a red flag in the fact this business has deteriorated so quickly in such a short time frame, suggesting a potential equity raising might follow next.
An interest cover ratio of 1.2x feels too tight for a company downgrading in a rising rates environment, the broker surmises. Downgrade to Market Weight from Overweight.
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SYMBIO HOLDINGS LIMITED ((SYM)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity believes Aussie Broadband's ((ABB)) bid for Symbio Holdings is too low, based on previous comparable transaction values and optionality over the Asian expansion strategy.
The broker lowers its target for Symbio to $3.00 from $4.45 to nearly align with the $3.01 Symbio board-backed offer, and downgrades the rating to Hold from Buy.
TALON ENERGY LIMITED ((TPD)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0
If everything goes according to plan, Talon Energy won't be a stand-alone operation for much longer. Target and suitor Strike Energy ((STX)) are aiming for a meeting in early December to work out the details.
Canaccord Genuity has downgraded to Hold from Speculative Buy, with a 24c price target.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | JANUS HENDERSON GROUP PLC | Neutral | Sell | Jarden | |
| 2 | WESTPAC BANKING CORPORATION | Neutral | Sell | Jarden | |
| Downgrade | |||||
| 3 | CSR LIMITED | Neutral | Buy | Jarden | |
| 4 | INTEGRAL DIAGNOSTICS LIMITED | Neutral | Buy | Wilsons | |
| 5 | INTEGRAL DIAGNOSTICS LIMITED | Neutral | Buy | Jarden | |
| 6 | SYMBIO HOLDINGS LIMITED | Neutral | Buy | Canaccord Genuity | |
| 7 | TALON ENERGY LIMITED | Neutral | N/A | Canaccord Genuity | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| AKE | Allkem | $8.72 | Jarden | 12.00 | 14.60 | -17.81% |
| ALC | Alcidion Group | $0.07 | Petra Capital | 0.13 | 0.15 | -13.33% |
| APA | APA Group | $8.37 | Jarden | 9.20 | 10.15 | -9.36% |
| ARX | Aroa Biosurgery | $0.72 | Jarden | 1.26 | 1.34 | -5.97% |
| CKF | Collins Foods | $9.59 | Wilsons | 11.19 | 11.16 | 0.27% |
| CRD | Conrad Asia Energy | $1.27 | Canaccord Genuity | 2.68 | 2.69 | -0.37% |
| CSR | CSR | $5.96 | Goldman Sachs | 6.50 | 6.45 | 0.78% |
| Jarden | 6.00 | 5.70 | 5.26% | |||
| DUG | DUG Technology | $1.88 | Canaccord Genuity | 2.00 | 1.22 | 63.93% |
| GLL | Galilee Energy | $0.06 | Canaccord Genuity | 0.08 | 0.39 | -79.49% |
| GNX | Genex Power | $0.18 | Canaccord Genuity | 0.26 | 0.27 | -3.70% |
| HFR | Highfield Resources | $0.39 | Canaccord Genuity | 1.21 | 1.50 | -19.33% |
| HLI | Helia Group | $3.87 | Goldman Sachs | 4.09 | 4.02 | 1.74% |
| IDX | Integral Diagnostics | $1.81 | Goldman Sachs | 2.70 | 3.60 | -25.00% |
| Jarden | 2.38 | 3.23 | -26.32% | |||
| Jarden | 2.58 | 3.23 | -20.12% | |||
| Wilsons | 2.00 | 3.43 | -41.69% | |||
| IPD | ImpediMed | $0.14 | Wilsons | 0.26 | 0.39 | -33.33% |
| JHG | Janus Henderson | $39.71 | Jarden | 39.70 | 38.60 | 2.85% |
| JHX | James Hardie Industries | $48.14 | Goldman Sachs | 54.45 | 51.70 | 5.32% |
| MQG | Macquarie Group | $167.69 | Goldman Sachs | 180.80 | 194.99 | -7.28% |
| MYX | Mayne Pharma | $4.61 | Wilsons | 4.00 | 3.20 | 25.00% |
| OCC | Orthocell | $0.42 | Petra Capital | 1.28 | 1.35 | -5.19% |
| ORA | Orora | $2.54 | Goldman Sachs | 3.55 | 3.92 | -9.44% |
| QBE | QBE Insurance | $15.14 | Jarden | 21.00 | 20.00 | 5.00% |
| STO | Santos | $6.97 | Goldman Sachs | 7.20 | N/A | – |
| SYM | Symbio Holdings | $2.91 | Canaccord Genuity | 3.00 | 3.05 | -1.64% |
| TPG | TPG Telecom | $4.78 | Jarden | 5.40 | 6.10 | -11.48% |
| TWE | Treasury Wine Estates | $10.77 | Jarden | 12.30 | 13.50 | -8.89% |
| WBC | Westpac | $21.15 | Goldman Sachs | 22.70 | 22.59 | 0.49% |
| WDS | Woodside Energy | $31.07 | Goldman Sachs | 35.80 | N/A | – |
| XRO | Xero | $100.10 | Wilsons | 126.93 | 126.32 | 0.48% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
VIT VITURA HEALTH LIMITED
Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.32
Petra Capital rates ((VIT)) as Buy (1) –
Vitura Health has conducted a presentation outlining the rationale for the Doctors on Demand acqusiition, not the least of which was annualised revenue of $18.2m (based on September revenue), an opportunity to diversify revenue streams, and insights into higher value medications that could boost distribution revenue.
Petra Capital also points out the regulatory driven shift from asynchronous telehealth consultations to live tele consultations, for which Doctors on Demand is well position.
The broker observes telehealth consultations constitute less than 1% of market share, and expects rapid growth.
Buy rating and 70c target price retained.
This report was published on November 3, 2023.
Target price is $0.70 Current Price is $0.32 Difference: $0.38
If VIT meets the Petra Capital target it will return approximately 119% (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 1.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 3.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.67.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 1.00 cents and EPS of 4.60 cents.
At the last closing share price the estimated dividend yield is 3.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.96.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
APM APM HUMAN SERVICES INTERNATIONAL LIMITED
Healthcare – Overnight Price: $1.40
Canaccord Genuity rates ((APM)) as Initiation of coverage with Buy (1) –
Canaccord Genuity has initiated coverage of APM Human Services International with a Buy rating and $2.65 price target, suggesting the long duration contracts that are typical for the business support a solid revenue base.
Recent new contract wins and additional tender opportunities only add further potential, or so the narrative goes.
For now, the broker has penciled in single digit growth annually for EBITDA and net profits, but new contracts or acquisitions could up the ante. The balance sheet should gradually delever.
This report was published on November 6, 2023.
Target price is $2.65 Current Price is $1.40 Difference: $1.255
If APM meets the Canaccord Genuity target it will return approximately 90% (excluding dividends, fees and charges).
Current consensus price target is $2.55, suggesting upside of 82.8%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Canaccord Genuity forecasts a full year FY24 dividend of 11.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 7.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.64.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.5, implying annual growth of 58.0%.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 7.2%.
Current consensus EPS estimate suggests the PER is 7.5.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 11.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 7.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.07.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 21.3, implying annual growth of 15.1%.
Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 8.3%.
Current consensus EPS estimate suggests the PER is 6.5.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DLI DELTA LITHIUM LIMITED
New Battery Elements – Overnight Price: $0.52
Canaccord Genuity rates ((DLI)) as Speculative Buy (1) –
Delta Lithium has received the green light to start operating at Mt Ida Lithium in the WA Goldfields and Canaccord Genuity comments the project is effectively 'shovel ready'.
The broker still awaits the release of mining studies. Delta Lithium is expected to start mining "in the coming months".
While this is a lithium mining operation, Canaccord Genuity sees options for additional gold leverage.
The Speculative Buy rating and target price of $1.20 are retained. Modeling is currently ex-gold, points out the broker.
This report was published on November 6, 2023.
Target price is $1.20 Current Price is $0.52 Difference: $0.68
If DLI meets the Canaccord Genuity target it will return approximately 131% (excluding dividends, fees and charges).
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NDO NIDO EDUCATION LIMITED
Childcare – Overnight Price: $0.93
Wilsons rates ((NDO)) as Initiation of coverage with Overweight (1) –
Wilsons believes Nido Education offers the highest-quality child care exposure on the ASX and initiates research coverage with an Overweight rating and $1.32 target price.
The broker suggests the company's partnership with a third-party incubator creates a superior risk-adjusted growth profile.
There is material upside to the analyst's conservative FY24 earnings estimates should the occupancy level forecast of 82% (the prospectus forecast also) be exceeded. It's noted levels are already ahead of forecasts for FY23 year-to-date.
Wilsons cites other positives including several long-term structural industry tailwinds, including bipartisan government funding support, along with increasing female and dual-partner workforce participation.
This report was published on November 8, 2023.
Target price is $1.32 Current Price is $0.93 Difference: $0.39
If NDO meets the Wilsons target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Wilsons forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 3.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 25.14.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 5.20 cents and EPS of 10.00 cents.
At the last closing share price the estimated dividend yield is 5.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.30.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TLS TELSTRA GROUP LIMITED
Telecommunication – Overnight Price: $3.83
Jarden rates ((TLS)) as Initiation of coverage with Buy (1) –
Jarden calculates a combined telecommunications industry return on invested capital (ROIC) of 5.9%, and notes Telstra Group's sector-leading ROIC of 8.7%. Research coverage is initiated with a Buy rating and $4.30 target.
The broker sees a clear incentive for all players to drive revenue growth through price rather than market share, until industry returns normalise, which should lift all boats on a rising tide.
Key risks include an unexpected step-up in mobile competition and a regional roaming deal between TPG Group and Optus, explains the analyst. Potential upside is noted for InfraCo Fixed should management reassess its capital structure.
This report was published on November 7, 2023.
Target price is $4.30 Current Price is $3.83 Difference: $0.47
If TLS meets the Jarden target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $4.47, suggesting upside of 16.7%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 17.00 cents and EPS of 17.60 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 21.76.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.0, implying annual growth of 7.8%.
Current consensus DPS estimate is 17.7, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 21.3.
Forecast for FY25:
Jarden forecasts a full year FY25 dividend of 19.00 cents and EPS of 19.90 cents.
At the last closing share price the estimated dividend yield is 4.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.25.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 19.7, implying annual growth of 9.4%.
Current consensus DPS estimate is 18.5, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 19.4.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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CHARTS
For more info SHARE ANALYSIS: ABB - AUSSIE BROADBAND LIMITED
For more info SHARE ANALYSIS: CSR - CSR LIMITED
For more info SHARE ANALYSIS: IDX - INTEGRAL DIAGNOSTICS LIMITED
For more info SHARE ANALYSIS: JHG - JANUS HENDERSON GROUP PLC
For more info SHARE ANALYSIS: STX - STRIKE ENERGY LIMITED
For more info SHARE ANALYSIS: SYM - SYMBIO HOLDINGS LIMITED
For more info SHARE ANALYSIS: TPD - TALON ENERGY LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION