In Case You Missed It – BC Extra Upgrades & Downgrades – 21-12-23

This story features COCHLEAR LIMITED, and other companies. For more info SHARE ANALYSIS: COH

Broker Rating Changes (This Week)

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ALLKEM LIMITED ((AKE)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

With Allkem's shareholders set to vote on the company's proposed merger with Livent this week, Jarden sees the vote as asking shareholders to choose between retaining 100% exposure to Allkem's assets, or 56.1% of the potential combined assets.

The broker sees strong logic in "bringing together the complementary and proximal portfolio assets" but expects shareholders may be concerned by the potential that capital flows to the primary listing on the NYSE, effectively allowing a reverse takeover.

The rating is upgraded to Overweight from Neutral and the target price decreases to $11.40 from $12.00.

COCHLEAR LIMITED ((COH)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0

Wilsons has issued a 38% increase to its target price for Cochlear, so as to not allow discounted cash flow considerations to "stand in the way of making outperforming returns".

The broker points out more than a year ago it identified material pockets of fresh indication expansion unfolding in single-sided deafness and mixed or conductive hearing loss. Favourably for Cochlear, both feature reduced competitive intensity and have years left to run.

The rating is upgraded to Overweight from Market Weight and the target price increases to $318.46 from $230.84.

SANTOS LIMITED ((STO)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Prior to any Woodside Energy merger speculation, Jarden upgraded its rating for Santos (on December 6) to Overweight from Neutral after a share price sell-off.

At the time, the broker also lowered 12-month target prices across its Energy sector coverage by as much as -11%, after allowing for lower near-term oil and LNG prices, as well as a stronger Australian dollar.

The analysts' target for Santos was reduced to $7.25 from $7.85.

Following the merger talk, Jarden issued additional research on December 7, noting ACCC issues could potentially emerge (particularly in the West Coast gas market), but felt any concerns were manageable via prudent divestments.The target and rating were maintained.

WOODSIDE ENERGY GROUP LIMITED ((WDS)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0

Prior to any Santos merger speculation, Jarden upgraded its rating for Woodside Energy (on December 6) to Neutral from Underweight, following a share price sell-off.

At the time, the broker also lowered 12-month target prices across its Energy sector coverage by as much as -11%, after allowing for lower near-term oil and LNG prices, as well as a stronger Australian dollar.

The analysts' target for Woodside Energy was reduced to $30.50 from $34.

Following the merger talk, Jarden issued additional research on December 7, noting ACCC issues could potentially emerge (particularly in the West Coast gas market), but felt any concerns were manageable via prudent divestments. The target and rating were maintained.

Downgrade

AUCKLAND INTERNATIONAL AIRPORT LIMITED ((AIA)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden highlights a favourable weighted average cost of capital (WACC) outcome for Auckland International Airport from a review of PSE4 pricing.

The review was a part of the New Zealand Commerce Commission's final decision in its seven-yearly review of the input methodologies for regulated airports.

The broker's target price for Auckland International Airport is increased to NZ$7.71 from NZ$7.53 after the analyst assumes modestly higher returns and rolls forward the financial model for the company.

Jarden downgrades its rating to Underweight from Neutral on valuation given a recent share price rally.

Order	Company	New Rating	Old Rating	Broker
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1	ALLKEM LIMITED	Buy	Neutral	Jarden
2	COCHLEAR LIMITED	Buy	Neutral	Wilsons
3	SANTOS LIMITED	Buy	Neutral	Jarden
4	WOODSIDE ENERGY GROUP LIMITED	Neutral	Sell	Jarden
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5	AUCKLAND INTERNATIONAL AIRPORT LIMITED	Sell	Neutral	Jarden

Price Target Changes (This Week)

Company		Last Price	Broker	New Target	Old Target	Change
AKE	Allkem	$10.02	Jarden	11.40	12.00	-5.00%
BPT	Beach Energy	$1.62	Jarden	1.80	1.85	-2.70%
CGC	Costa Group	$3.12	Jarden	3.16	3.08	2.60%
COH	Cochlear	$298.05	Wilsons	318.46	230.84	37.96%
ENN	Elanor Investors	$1.45	Moelis	2.15	2.33	-7.73%
GNX	Genex Power	$0.17	Petra Capital	0.28	0.29	-3.51%
IEL	IDP Education	$20.50	Jarden	29.00	30.85	-6.00%
IGO	IGO	$9.02	Canaccord Genuity	7.00	8.00	-12.50%
			Jarden	10.61	13.46	-21.17%
IPL	Incitec Pivot	$2.88	Goldman Sachs	3.25	N/A	–
KAR	Karoon Energy	$2.06	Jarden	2.50	2.80	-10.71%
NEU	Neuren Pharmaceuticals	$22.99	Wilsons	27.23	22.79	19.48%
PLY	Playside Studios	$0.62	Canaccord Genuity	0.80	0.70	14.29%
PNR	Pantoro	$0.05	Petra Capital	0.13	0.14	-7.14%
REG	Regis Healthcare	$3.23	Jarden	3.35	3.21	4.36%
RGN	Region Group	$2.31	Moelis	2.54	2.66	-4.51%
RIC	Ridley Corp	$2.59	Moelis	2.87	2.64	8.71%
RRL	Regis Resources	$2.15	Goldman Sachs	1.95	1.90	2.63%
SGLLV	Ricegrowers	$6.60	Canaccord Genuity	9.60	9.45	1.59%
SPR	Spartan Resources	$0.47	Canaccord Genuity	0.65	0.60	8.33%
STO	Santos	$7.68	Jarden	7.25	7.85	-7.64%
TAH	Tabcorp Holdings	$0.86	Jarden	1.15	1.20	-4.17%
TIE	Tietto Minerals	$0.63	Canaccord Genuity	0.70	0.45	55.56%
WDS	Woodside Energy	$31.12	Jarden	30.50	34.00	-10.29%
Company		Last Price	Broker	New Target	Old Target	Change

More Highlights

LNW    LIGHT & WONDER INC

Gaming – Overnight Price: $125.89

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

Despite initial scepticism by the market, Jarden believes the aspirational target set by management at Light & Wonder for adjusted earnings (EBITDA) of US$1.4bn in FY25 is real and achievable.

Following a period of operational outperformance by the company, the broker points out the the consensus forecast is still -5% shy of this target.

Jarden sees potential for a further positive re-rate of the Light & Wonder share price to a premium multiple more akin to that of Aristocrat Leisure ((ALL)).

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

This report was published on December 13, 2023.

Target price is $141.00 Current Price is $125.89 Difference: $15.11
If LNW meets the Jarden target it will return approximately 12% (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 79.23.

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 33.76.

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

MGH    MAAS GROUP HOLDINGS LIMITED

Building Products & Services – Overnight Price: $3.94

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

Wilsons has assessed its Maas Group investment thesis. Construction Materials and Construction Contracting & Hire earnings expectations appear reasonable to the broker, with upside potential over the medium term based on Maas Group’s historical organic growth and return on capital targets.

Residential property fundamentals in key markets for Maas remain attractive, Wilsons suggests, supporting an eventual
recovery in demand. Notwithstanding the strong recent share price performance, the broker continues to see attractive value.

Overweight retained, target rises to $4.41 from $3.75

This report was published on December 20, 2023.

Target price is $4.41 Current Price is $3.94 Difference: $0.47
If MGH meets the Wilsons target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 8.00 cents and EPS of 25.20 cents.
At the last closing share price the estimated dividend yield is 2.03%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.63.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 11.00 cents and EPS of 31.90 cents.
At the last closing share price the estimated dividend yield is 2.79%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.35.

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

RFF    RURAL FUNDS GROUP

REITs – Overnight Price: $2.08

Moelis rates ((RFF)) as Initiation of coverage with Buy (1) –

Moelis has initiated coverage of Rural Funds with a Buy rating and $2.40 target. The fund offers exposure to institutional grade agricultural real estate, whilst mitigating operating risks generally associated with farming, the broker suggests.

Buying Rural Funds at a -29% discount to net asset value (with a 5.7% distribution yield) is a highly compelling investment
opportunity in Moelis' view.

Key catalysts include the divestment of assets to ensure the capital position remains strong, valuation uplift on capex programs,
and a recovery in the profitability of assets operated on balance sheet.

This report was published on December 20, 2023.

Target price is $2.40 Current Price is $2.08 Difference: $0.32
If RFF meets the Moelis target it will return approximately 15% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 11.70 cents and EPS of 11.20 cents.
At the last closing share price the estimated dividend yield is 5.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.57.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 11.80 cents and EPS of 11.90 cents.
At the last closing share price the estimated dividend yield is 5.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.48.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SPZ    SMART PARKING LIMITED

Hardware & Equipment – Overnight Price: $0.35

Petra Capital rates ((SPZ)) as Initiation of coverage with Buy (1) –

Petra Capital initiates coverage on Smart Parking with a Buy rating and a target price of 56 cents. The company offers car parking technology solutions that has evolved into a cloud-centered service provider with a focus on automated number plate recognition solutions.

Having established a profitable business in the United Kingdom, Smart Parking is now in the early stages of penetrating the German market, which Petra Capital sees as a 140,000 site opportunity. The broker expects a "healthy stream of announcements" as the company evaluates new markets.

This report was published on December 11, 2023.

Target price is $0.56 Current Price is $0.35 Difference: $0.21
If SPZ meets the Petra Capital target it will return approximately 60% (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 2.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.00.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.29.

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

WC8    WILDCAT RESOURCES LIMITED

Overnight Price: $0.77

Canaccord Genuity rates ((WC8)) as Initiation of coverage with Speculative Buy (1) –

Canaccord Genuity has initiated coverage on exploration company Wildcat Resources. Since acquiring its primary asset, the Tabba Tabba lithium project, in May, Wildcat Resources has enjoyed a 3,000% share price rally.

Share price growth was helped by recent drilling results at Tabba Tabba, suggesting substantial lithium mineralisation. Given drilling results, Canaccord Genuity expects Tabba Tabba could prove another tier 1 lithium asset, and feels a resource in the region of 100m tonnes for the Leia, Chew, Han and Hutt pegmatites is a realistic initial goal.

The broker initiates with a Speculative Buy rating and a target price of $1.15.

This report was published on December 19, 2023.

Target price is $1.15 Current Price is $0.77 Difference: $0.38
If WC8 meets the Canaccord Genuity target it will return approximately 49% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

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

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