Daily Market Reports | Feb 09 2024
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)
29M A11 ALC ALU CCP CMM CXO FBU IGO INR LLL LTR MP1 NEC NUC NWS NXS OML PLY PNI PXA RED SDR SFR (2) SLR (2) SWM WTC XRO
29M 29METALS LIMITED
Copper - Overnight Price: $0.26
Canaccord Genuity rates ((29M)) as Upgrade to Hold from Sell (3) -
29Metals' December quarter result missed consensus forecasts on a number of items, including production of 5,200 ounces at Golden Grove and 2,400 at Capricorn Copper.
Canaccord Genuity notes C1 cash costs declined -7% quarter-on-quarter to US$3.06 per pound. All-in sustaining costs declined -11% quarter-on-quarter to US$3.71 per pound, but remained higher than the broker's estimated US$1.57 per pound.
The rating is upgraded to Hold from Sell and the target price decreases to 41 cents from 59 cents.
This report was published on January 30, 2024.
Target price is $0.41 Current Price is $0.26 Difference: $0.155
If 29M meets the Canaccord Genuity target it will return approximately 61% (excluding dividends, fees and charges).
Current consensus price target is $0.60, suggesting upside of 135.3%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY23:
Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.38.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is -23.2, 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 FY24:
Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 8.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.19.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is -7.0, 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 N/A.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
A11 ATLANTIC LITHIUM LIMITED.
New Battery Elements - Overnight Price: $0.37
Wilsons rates ((A11)) as Overweight (1) -
Wilsons reviews the lithium market and adjusts its price deck and equity ratings after "expanding" its approach to lithium pricing. The broker holds the faith, believing recent lows are typical of a bottoming commodities cycle rather than a structural decline, and that the fundamental outlook is still very strong, and forecasts sharp long-term price rises (albeit sharply downgrading near-term prices).
The broker says its expanded approach, covering 1.3Mt LCE of potential additional supply demanding a minimum required cash flow internal rate of return of 15%, suggests that more than 50% of potential new global spodumene supply will not be developed at current spodumene prices. The read-through is that prices will need to rise to encourage supply.
Under this approach, Wilsons forecasts that long-term spodumene prices will rise 13% US$1550/t and long-term Lithium Carbonate prices will fall -20% to US$20,000/t - substantially higher than current prices of US$850/t and US$16,500/t respectively.
Under this scenario, Wilsons says some miners will have a more nuanced future than just "buy lithium" - but not Atlantic Lithium, which is the broker's top pick.
The company is the only producer under coverage to escape Wilsons' near-term downgrade wrath given production starts in FY26.
Overweight rating retained. Target price rises 10% to $1.05.
This report was published on February 5, 2024.
Target price is $1.05 Current Price is $0.37 Difference: $0.68
If A11 meets the Wilsons target it will return approximately 184% (excluding dividends, fees and charges).
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 1.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 24.67.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 185.00.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ALC ALCIDION GROUP LIMITED
Healthcare services - Overnight Price: $0.05
Canaccord Genuity rates ((ALC)) as Buy (1) -
Alcidion Group reported 2Q24 results which met Canaccord Genuity's expectations but the company continues to experience NHS procurement delays and sluggish revenue and TCV growth.
The broker is looking to the 1H24 results announcement to offer more details around how earnings are shaping up for the full year with concerns that current guidance is looking overly optimistic.
Management continued cost cutting measures with $2.4m excised leading to a circa $1.2m positive result in the 2H24.
The broker's Buy rating is unchanged and the price target falls to 10c from 13c.
This report was published on January 31, 2024.
Target price is $0.10 Current Price is $0.05 Difference: $0.05
If ALC meets the Canaccord Genuity target it will return approximately 100% (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 minus 0.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.67.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 12.50.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ALU ALTIUM
Hardware & Equipment - Overnight Price: $50.98
Goldman Sachs rates ((ALU)) as Neutral (3) -
It is clear to Goldman Sachs that market expectations for interest rates will be a significant determinant of share price performance and shareholder returns for its domestic telecoms, media and technology (TMT) coverage through the coming year.
Overall, the broker sees the TMT space as well-positioned to continue to deliver robust earnings growth. It expects rate cuts to underpin a renewed focus on growth.
For Altium, the Neutral rating is retained and the target price increases to $50.00 from $47.00.
This report was published on January 30, 2024.
Target price is $50.00 Current Price is $50.98 Difference: minus $0.98 (current price is over target).
If ALU meets the Goldman Sachs target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $48.07, suggesting downside of -5.7%(ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is 97.0, implying annual growth of N/A.
Current consensus DPS estimate is 95.5, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 52.6.
Forecast for FY25:
Current consensus EPS estimate is 120.4, implying annual growth of 24.1%.
Current consensus DPS estimate is 93.6, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 42.3.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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