Australian Broker Call *Extra* Edition – Dec 11, 2023

This story features 3P LEARNING LIMITED, and other companies. For more info SHARE ANALYSIS: 3PL

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)

3PL   AKG   CGF   CIA   CU6   CVW   GTK   IRE   LNW   PLT   REG   RFG  

3PL    3P LEARNING LIMITED

Education & Tuition – Overnight Price: $1.24

Taylor Collison rates ((3PL)) as Initiation of coverage with Speculative Buy (1) –

Taylor Collison initiates coverage on 3P Learning with a Speculative Buy in the belief management is well placed to grow licence numbers in the B2B and B2C channels over the medium term.

From FY25 the broker expects a ramp-up in sales via newly launched products and an increase in average revenue per user (ARPU) driven by solution selling.

Significant board and management ownership shareholder provides alignment with ordinary shareholders,notes the broker.

The analyst begins with a $1.46 target and notes Taylor Collison's bear case for the company assumes a valuation floor of $1.25/share.

This report was published on December 11, 2023.

Target price is $1.46 Current Price is $1.24 Difference: $0.225
If 3PL meets the Taylor Collison target it will return approximately 18% (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 0.00 cents and EPS of 3.95 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.27.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 0.00 cents and EPS of 4.96 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.90.

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

AKG    ACADEMIES AUSTRALASIA GROUP LIMITED

Overnight Price: $0.30

Taylor Collison rates ((AKG)) as Initiation of coverage with Speculative Buy (1) –

Taylor Collison initiates research coverage on Academies Australasia with a Speculative Buy rating and 40c target price. Significant exposure to the influx of international students into Australia is considered attractive, while the Goulburn Street expansion should assist.

The majority of courses at Goulburn Street are high margin, notes the analyst, and given the company's relatively fixed cost base, should generate operating leverage as enrolment numbers grow.

The broker suggests tuition pre-payments are supportive of significant revenue growth, while 67% board and management ownership should also help drive value. Moreover, it's felt the company's college portfolio is not fully reflected in the current market capitalisation.

This report was published on December 11, 2023.

Target price is $0.40 Current Price is $0.30 Difference: $0.095
If AKG meets the Taylor Collison target it will return approximately 31% (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 0.64 cents and EPS of 0.80 cents.
At the last closing share price the estimated dividend yield is 2.10%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 38.13.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 2.44 cents and EPS of 3.30 cents.
At the last closing share price the estimated dividend yield is 8.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.24.

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

CGF    CHALLENGER LIMITED

Wealth Management & Investments – Overnight Price: $6.06

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

Goldman Sachs has taken a closer look at the impacts of the IFRS17 insurance accounting requirements changes on Challenger, firstly noting the changes impact only insurance contracts and not investment contracts, the latter of which represents the majority of Challenger's liabilities.

The broker expects no impact to normalised profit, but notes an increase in net assets by $253m for FY23, which also underpins a 0.6% increase in return on equity for the year.

The Buy rating and target price of $7.05 are retained.

This report was published on December 4, 2023.

Target price is $7.05 Current Price is $6.06 Difference: $0.99
If CGF meets the Goldman Sachs target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $6.73, suggesting upside of 10.7%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 23.00 cents and EPS of 58.00 cents.
At the last closing share price the estimated dividend yield is 3.80%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 50.3, implying annual growth of 19.3%.
Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 12.1.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 25.00 cents and EPS of 62.00 cents.
At the last closing share price the estimated dividend yield is 4.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 57.1, implying annual growth of 13.5%.
Current consensus DPS estimate is 27.0, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 10.6.

Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CIA    CHAMPION IRON LIMITED

Iron Ore – Overnight Price: $7.76

Jarden rates ((CIA)) as Buy (1) –

Champion Iron has announced the closure of a US$230m term loan facility, effectively retiring the US$400m balance of its revolving credit facility, freeing up US$400m in liquidity to supplement operating free cash flow.

Jarden estimates this leaves Champion Iron with sufficient operating free cash flow to fund the capital expenditure required to augment the phase II concentrator at Bloom Lake, estimated at CAD$470m.

The broker, however, is increasingly expectant that the company will pursue modification of both concentrators, delivering at least 15m tonnes per annum of direct reduction pellet feed product. 

The Buy rating is retained and the target price increases to $8.54 from $7.44.

This report was published on December 1, 2023.

Target price is $8.54 Current Price is $7.76 Difference: $0.78
If CIA meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 23.47 cents and EPS of 79.12 cents.
At the last closing share price the estimated dividend yield is 3.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.81.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 1.12 cents and EPS of 87.39 cents.
At the last closing share price the estimated dividend yield is 0.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.88.

This company reports in CAD. 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

CU6    CLARITY PHARMACEUTICALS LIMITED

Medical Equipment & Devices – Overnight Price: $1.57

Wilsons rates ((CU6)) as Overweight (1) –

Clarity Pharmaceuticals has released additional data from its heranostic prostate cancer trial, with the initial cohort three patients given the highest dose, and the company receiving the green light to recruit a final three patients for this cohort.

According to Clarity Pharmaceuticals, two of the three patients to have received this dose have reported prostate specific antigen (PSA) declines of -40% and more than -90% within eight weeks of dosing. 

Particularly impressive, says Wilsons, is early indications of the results of multi-dosing, with a cohort two patient returning undetectable PSA levels and undetectable levels of cancer in two lesions following a second dosing.

The Overweight rating and target price of $1.55 are retained.

This report was published on November 30, 2023.

Target price is $1.55 Current Price is $1.57 Difference: minus $0.02 (current price is over target).
If CU6 meets the Wilsons target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
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 minus 13.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.38.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 17.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.02.

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

CVW    CLEARVIEW WEALTH LIMITED

Insurance – Overnight Price: $0.57

Taylor Collison rates ((CVW)) as Initiation of coverage with Buy (1) –

As Clearview Wealth is currently winning 11% of all new life insurance business sold through advisers in Australia, and shares are trading at an around -40% discount to Taylor Collison's estimate of fair value, coverage is initiated with a Buy rating.

The company's current total market share is only 3.2% of a $10bn market, which has grown at an around 5% historical compound annual growth rate (CAGR), notes the analyst. An 83c target is set.

The broker sees no impediment to market share gain given the industry has now ‘rebased’ following the Hayne Royal Commission and Clearview's operations are now more focused, having exited its financial advice (CAF) business.

This report was published on December 1, 2023.

Target price is $0.83 Current Price is $0.57 Difference: $0.26
If CVW meets the Taylor Collison target it will return approximately 46% (excluding dividends, fees and charges).

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 2.40 cents and EPS of 5.20 cents.
At the last closing share price the estimated dividend yield is 4.21%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.96.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 3.40 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 5.96%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.26.

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: $5.98

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

At a recent strategy day, Gentrack Group highlighted that product innovation required by the energy transition should prove a tailwind for the utilities business. 

Jarden concurs Gentrack Group should be well positioned to benefit from this trend, and the additional flexibility required in customer billing software. With legacy players having 75% of the market share, there remains attractive opportunity for Gentrack Group, says Jarden.

The Underweight rating and target price of NZ$5.00 are retained.

This report was published on December 1, 2023.

Current Price is $5.98. Target price not assessed.
The company's fiscal year ends in September.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 10.45 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 57.21.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 17.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.57.

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

IRE    IRESS LIMITED

Wealth Management & Investments – Overnight Price: $8.14

Wilsons rates ((IRE)) as Upgrade to Overweight from Underweight (1) –

Wilsons has been impressed by the speed of turnaround from Iress, with cost initiatives appearing to take effect amid FY24 earnings upgrades of 8-9%, which, notes the broker, are expected to drop through to net profit.

The broker expects the company's mortgage segment to be the next divestment target, and potential proceeds exceeding $100m could deliver meaningful balance sheet  deleveraging and temper the return on invested capital trajectory.

The rating is upgraded to Overweight from Underweight and the target price increases to $8.16 from $5.68.

This report was published on December 1, 2023.

Target price is $8.16 Current Price is $8.14 Difference: $0.02
If IRE meets the Wilsons target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $8.56, suggesting upside of 7.2%(ex-dividends)
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 24.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 33.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.5, implying annual growth of -94.8%.
Current consensus DPS estimate is 11.2, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 532.7.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 25.00 cents and EPS of 31.60 cents.
At the last closing share price the estimated dividend yield is 3.07%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.76.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 30.0, implying annual growth of 1900.0%.
Current consensus DPS estimate is 26.0, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 26.6.

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

LNW    LIGHT & WONDER INC

Gaming – Overnight Price: $127.95

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

Light & Wonder has commenced its corporate social responsibility (CSR) journey, and Jarden believes the company now has acceptable governance procedures in place while its broader ESG credentials are evolving.

The broker describes Light & Wonder's ESG credentials as evolving, noting it is now more commercially compliant than peers. The broker expects a "laser like" adherance to a heavily regulated and compliant sector should work in its favour amid the opening of US iGaming markets.

The Overweight rating and target price of $141.00 are retained.

This report was published on December 1, 2023.

Target price is $141.00 Current Price is $127.95 Difference: $13.05
If LNW meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 158.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 80.52.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 372.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 34.31.

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

PLT    PLENTI GROUP LIMITED

Business & Consumer Credit – Overnight Price: $0.68

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

Plenti Group's 1H results were largely in line with a 2Q trading update on October 21, according to Wilsons.

Management also announced a new strategic partnership with National Australia Bank ((NAB)), which the broker believes presents a sizeable medium-term growth opportunity for the Automotive and Renewable lending verticals.

Creating alignment and an incentive for growth, notes the analyst, the partnership allows NAB to acquire up to a 15% shareholding in Plenti subject to loan book milestones.

Wilsons raises its target by 22% to $1.10. Overweight.

This report was published on December 1, 2023.

Target price is $1.10 Current Price is $0.68 Difference: $0.42
If PLT meets the Wilsons target it will return approximately 62% (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 2.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.29.

Forecast for FY25:

Wilsons forecasts a full year FY25 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 136.00.

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

REG    REGIS HEALTHCARE LIMITED

Aged Care & Seniors – Overnight Price: $2.99

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

Jarden is anticipating the completion of Regis Healthcare's acquisition of CPSM for a consideration of $74.2m. The acquisition will comprise five homes, and 644 beds, following the announcement of the intended acquisition in mid-November.

As Jarden points out, the purchase represents Regis Healthcare's first step to deploy capital post-covid, making use of tits reduced gearing and $400m balance sheet headroom through expansion of its aged care footprint.

The acquisition makes strategic sense to Jarden, being not only material in size but strategically in line with Regis Healthcare's focus on premium homes. The Overweight rating is retained and the target price increases to $3.21 from $2.87.

This report was published on December 1, 2023.

Target price is $3.21 Current Price is $2.99 Difference: $0.22
If REG meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 4.00 cents and EPS of 9.40 cents.
At the last closing share price the estimated dividend yield is 1.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 31.81.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 4.00 cents and EPS of 11.80 cents.
At the last closing share price the estimated dividend yield is 1.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.34.

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

RFG    RETAIL FOOD GROUP LIMITED

Food, Beverages & Tobacco – Overnight Price: $0.06

Petra Capital rates ((RFG)) as Buy (1) –

Based on a trading update from Retail Food, Petra Capital notes trading year-to-date appears in line with expectations. The company reports a 1.8% increase in same store sales, underpinned by softer foot traffic but higher average transaction value.

The company announced the acquisition of Beefy's Pies for a consideration of $8m. Petra likes the acquisition, finding it inline with company store strategy. The broker expects the store footprint can be expanded fairly easily, with Brisbane being a key initial target area.

The Buy rating is retained and the target price increases to 9.5 cents from 9.0 cents.

This report was published on December 1, 2023.

Target price is $0.10 Current Price is $0.06 Difference: $0.039
If RFG meets the Petra Capital target it will return approximately 70% (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 0.20 cents and EPS of 0.90 cents.
At the last closing share price the estimated dividend yield is 3.57%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.22.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.40 cents and EPS of 1.10 cents.
At the last closing share price the estimated dividend yield is 7.14%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.09.

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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