Australian Broker Call *Extra* Edition – Dec 06, 2023

This story features AROA BIOSURGERY LIMITED, and other companies. For more info SHARE ANALYSIS: ARX

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)

ARX (2)   CKF (2)   CSL   GTK   IPG   MCP   MDR   QBE   WGX   WR1  

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.66

Jarden rates ((ARX)) as Buy (1) –

A slightly softer first half operational result from Aroa Biosurgery than Jarden had anticipated, with the company reporting a loss of -NZ$2.7m, below Jarden's expected -$NZ1.8m. 

The result was driven by lower product revenues amid softer Tela Bio and Myriad sales. Tela Bio recently downgraded its 2023 revenue guidance by -6.4%, with the implementation of a new salesforce structure disrupting sales rep productivity, but expects less disruption ahead.

The Buy rating is retained and the target price decreases to $1.20 from $1.26.

This report was published on November 29, 2023.

Target price is $1.20 Current Price is $0.66 Difference: $0.54
If ARX meets the Jarden target it will return approximately 82% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.46 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 142.86.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 2.04 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 32.43.

This company reports in NZD. 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

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

Aroa Biosurgery's first half result failed to impress Wilsons, though the broker does feel it is clear management is developing a sophisticated, high growth company, and revenue and earnings predictability are improving. 

The broker notes, as anticipated, the weaker first half sales skew for both Myriad and OviTex dragged on earnings, but the company remains bullish on the former, anticipating a 60% sales lift for Myriad in the second half and 100% growth over the full year.

The Overweight rating is retained and the target price decreases to $1.60 from $1.69.

This report was published on November 29, 2023.

Target price is $1.60 Current Price is $0.66 Difference: $0.94
If ARX meets the Wilsons target it will return approximately 142% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.93 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 71.35.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 1.57 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.96.

This company reports in NZD. 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

CKF    COLLINS FOODS LIMITED

Food, Beverages & Tobacco – Overnight Price: $11.34

Jarden rates ((CKF)) as Neutral (3) –

Another margin beat by Collins Foods saw the company deliver a 6% beat to consensus earnings expectations in the first half. Jarden points out all divisions reported margin expansions, costs were well controlled and cash flow was good.

The broker does not expect the mid to high single digit same store sales growth trend is sustainable, with same store sales growth for KFC Australia slowing to 2.9% in the second half to date. Jarden expects slowing demand and a focus on value is likely to impact on Australia.

The Neutral rating is retained and the target price increases to $10.00 from $9.20.

This report was published on November 29, 2023.

Target price is $10.00 Current Price is $11.34 Difference: minus $1.34 (current price is over target).
If CKF meets the Jarden target it will return approximately minus 12% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $11.99, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in May.

Forecast for FY24:

Jarden forecasts a full year FY24 EPS of 54.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.2, implying annual growth of 361.4%.
Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 22.6.

Forecast for FY25:

Jarden forecasts a full year FY25 EPS of 64.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.9, implying annual growth of 29.3%.
Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 17.5.

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

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

A strong first half result from Collins Foods, says Wilsons, particularly noting the significant margin improvement. According to the broker, this result validates expectations that margins can and will return to historical levels over the medium term.

Offsetting this was an abrupt slowdown in same store sales growth for KFC Australia, and the broker expects some reinvestment in promotional activity may be required in the near-term. The brand has reported 2.9% same store sales growth in the early second half.

The Overweight rating is retained and the target price increases to $13.41 from $11.19.

This report was published on December 29, 2023.

Target price is $13.41 Current Price is $11.34 Difference: $2.07
If CKF meets the Wilsons target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $11.99, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in May.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 27.50 cents and EPS of 49.40 cents.
At the last closing share price the estimated dividend yield is 2.43%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.96.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.2, implying annual growth of 361.4%.
Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 22.6.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 35.50 cents and EPS of 59.10 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 19.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 64.9, implying annual growth of 29.3%.
Current consensus DPS estimate is 35.1, implying a prospective dividend yield of 3.1%.
Current consensus EPS estimate suggests the PER is 17.5.

Market Sentiment: 0.3
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: $263.12

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

Wilsons assesses the collective upside for CSL from Patient Blood Management (PBM)-associated IV iron and fibrinogen is approximately 5% at the segment earnings level. 

Should CSL Behring and Vifor combine their efforts efficiently, the broker suggests PBM could create a new avenue for IV iron growth, distinct from Vifor’s core business.

Wilsons maintains its Overweight rating for CSL. EPS forecasts fall marginally due to unfavourable currency movements and a lower target of $300 is set.

This report was published on November 29, 2023.

Target price is $300.00 Current Price is $263.12 Difference: $36.88
If CSL meets the Wilsons target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $329.70, suggesting upside of 25.3%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 415.03 cents and EPS of 923.18 cents.
At the last closing share price the estimated dividend yield is 1.58%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 28.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 952.0, implying annual growth of N/A.
Current consensus DPS estimate is 415.6, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 27.6.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 472.99 cents and EPS of 1083.91 cents.
At the last closing share price the estimated dividend yield is 1.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.28.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1221.5, implying annual growth of 28.3%.
Current consensus DPS estimate is 536.0, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 21.5.

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

GTK    GENTRACK GROUP LIMITED

Software & Services – Overnight Price: $6.00

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

Another strong set of financials from Gentrack Group, says Canaccord Genuity, with the company not only reporting a beat across all metrics but also upgrading full year guidance by 7%, marking the fourth upgrade issued by the company in twelve months.

According to Canaccord Genuity, the multiple guidance upgrades are indicative of ongoing customer and product execution under the company's new management team. The broker lifts its revenue forecasts 8% each year through to FY26.

The Buy rating is retained and the target price increases to NZ$7.50 from NZ$5.00.

This report was published on November 28, 2023.

Current Price is $6.00. Target price not assessed.
The company's fiscal year ends in September.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 EPS of 13.14 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 45.68.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 EPS of 15.73 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.15.

This company reports in NZD. 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

IPG    IPD GROUP LIMITED

Industrial Sector Contractors & Engineers – Overnight Price: $4.65

Moelis rates ((IPG)) as Buy (1) –

IPD Group has announced its acquisition of electrical cable distributor CMI Operations, for a total consideration of -$104.3m. Payment will comprise -$92.1m upfront, with a potential -$8.9m earn out. 

Moelis points out CMI Operations owns six warehouses across four states, servicing 500 customers nationally. The company delivered $104.3m in sales in FY23, and $15.5m in earnings. The broker expects this can deliver revenue synergies and cross-sell opportunities.

The Buy rating is retained and the target price decreases to $5.05 from $5.27.

This report was published on November 28, 2023.

Target price is $5.05 Current Price is $4.65 Difference: $0.4
If IPG meets the Moelis target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 11.40 cents and EPS of 23.90 cents.
At the last closing share price the estimated dividend yield is 2.45%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.46.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 15.00 cents and EPS of 30.00 cents.
At the last closing share price the estimated dividend yield is 3.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.50.

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

MCP    MCPHERSON'S LIMITED

Health & Nutrition – Overnight Price: $0.46

Moelis rates ((MCP)) as Hold (3) –

Improved gross profit margins have seen McPherson's report year-on-year earnings growth to date in FY24, as per a trading update at the recent annual general. 

Moelis notes revenue year-to-date is down -7%, with core brand sales down -3.5%, impacted by supply chain issues for Dr LeWinn's which have resolved in October. The remaining four core brands all delivered growth ahead of their respective categories.

The Hold rating is retained and the target price increases to 57 cents from 51 cents.

This report was published on November 28, 2023.

Target price is $0.57 Current Price is $0.46 Difference: $0.115
If MCP meets the Moelis target it will return approximately 25% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 5.40 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 11.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.58.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 6.10 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 13.41%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.59.

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

MDR    MEDADVISOR LIMITED

Healthcare services – Overnight Price: $0.21

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

A first half trading and strategy update from MedAdvisor has renewed Canaccord Genuity's confidence in the company meeting its expectations of a stronger full year at both the top and bottom lines. 

The company is guiding to year-on-year first half revenue growth of 10-15%, with Australia and New Zealand expected to deliver 15% growth amid fee increases and the US expected to deliver 8-13% growth.

The Buy rating and target price of 39 cents are retained.

This report was published on November 28, 2023.

Target price is $0.39 Current Price is $0.21 Difference: $0.18
If MDR meets the Canaccord Genuity target it will return approximately 86% (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

QBE    QBE INSURANCE GROUP LIMITED

Insurance – Overnight Price: $14.77

Jarden rates ((QBE)) as Buy (1) –

QBE Insurance has confirmed its full year combined ratio outlook remains intact, despite its crop combined ratio outlook edging higher, with the insurer benefiting from benign catastrophe claims over the second half.

Adjusting for both crop and catastrophe claims, Jarden estimates the underlying combined ratio remains at 92.5% for the second half, which the broker considers a solid improvement on the 93.3% first half ratio.

The Buy rating is retained and the target decreases to $20.90 from $21.00.

This report was published on November 27, 2023.

Target price is $20.90 Current Price is $14.77 Difference: $6.13
If QBE meets the Jarden target it will return approximately 42% (excluding dividends, fees and charges).
Current consensus price target is $17.29, suggesting upside of 17.1%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 108.66 cents and EPS of 142.62 cents.
At the last closing share price the estimated dividend yield is 7.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.36.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 137.9, implying annual growth of N/A.
Current consensus DPS estimate is 102.3, implying a prospective dividend yield of 6.9%.
Current consensus EPS estimate suggests the PER is 10.7.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 144.88 cents and EPS of 189.71 cents.
At the last closing share price the estimated dividend yield is 9.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 181.5, implying annual growth of 31.6%.
Current consensus DPS estimate is 125.5, implying a prospective dividend yield of 8.5%.
Current consensus EPS estimate suggests the PER is 8.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
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: $2.11

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

Westgold Resources' Big Bell asset expansion has been green lit, and while Canaccord Genuity had accounted for the expansion it had expected several aspects of the project to better align with short and medium-term outcomes.

The broker has lowered its production expectations from Murchison by an average -5% per annum between FY25-31, accouting for the tie in of the long-hole open stoping operation. The broker also models an eleven year mine life for Big Bell, with production extending to FY34.

The Buy rating is retained and the target price increases to $2.35 from $2.20.

This report was published on November 28, 2023.

Target price is $2.35 Current Price is $2.11 Difference: $0.24
If WGX meets the Canaccord Genuity target it will return approximately 11% (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 3.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 1.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.17.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 2.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 0.95%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.54.

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

WR1    WINSOME RESOURCES LIMITED

New Battery Elements – Overnight Price: $1.05

Canaccord Genuity rates ((WR1)) as Speculative Buy (1) –

While Winsome Resources is yet to issue a maiden resource for its Adina project, the company released  results of nineteen drill holes, with assays pending for a further 54. With 40,200 metres of drilling complete, the company intends to complete a further 10,000 metres by year's end.

Canaccord Genuity's conceptual resource for Adina sits at 55m tonnes at 1.2% lithium following this update, up 38% on its previous estimate, which would see Adina within the top five lithium resources in Canada.

Canaccord Genuity suggests the maiden resource could prove a share price catalyst. The Speculative Buy rating is retained and the target price decreases to $3.00 from $3.55.

This report was published on November 28, 2023.

Target price is $3.00 Current Price is $1.05 Difference: $1.945
If WR1 meets the Canaccord Genuity target it will return approximately 184% (excluding dividends, fees and charges).

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

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