Daily Market Reports | Feb 22 2024
An additional news report on the recommendation, valuation, forecast and opinion changes and updates for ASX-listedequities.
In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArenahas now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listedstocks, also enlarging the number of stocks that make up the FNArenauniverse.
One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availabilityofsuitable 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 publicationmay not be up to date, or yet awaiting another update by FNArena'steam 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.
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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)
A2M COH DOW DTL IDX IMD IPL MFG MGH OML ORG ORI RUL TLS(2) TWE
A2M A2 MILK COMPANY LIMITED
Dairy - Overnight Price: $5.70
Wilsons rates ((A2M)) as Downgrade to Market Weight from Overweight (3) -
Wilsons believesa2 Milk Co's management deserves credit for delivering a robust first half result amid a contracting China infant milk formula market, alongside significant channel mix changes.
First half revenue of $812m represented a 4% year-on-year increase, whlie earnings of $113m represented a 5% year-on-year increase, with the result underpinned by stronger Chinarevenue.
A guidance upgrade has the company expecting low to mid-single digit sales growthover the full year.
The rating is downgraded to Market Weight from Overweight and the target price increases to $5.85 from $5.47.
This report was published on February 20, 2024.
Target price is $5.85 Current Price is $5.70 Difference: $0.15
If A2M meets the Wilsons target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $6.08, suggesting upside of 6.7%(ex-dividends)
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 22.14 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 25.74.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 22.2, implying annual growth of N/A.
Current consensus DPS estimate is 0.9, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 25.7.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 22.98 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.81.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 26.6, implying annual growth of 19.8%.
Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 21.4.
This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
COH COCHLEAR LIMITED
Medical Equipment & Devices - Overnight Price: $341.07
Wilsons rates ((COH)) as Overweight (1) -
Cochlear's pre-guided December-half result outpaced Wilsons' forecast.
The broker observes strong structural tailwinds building for Cochlear, leading it to waive discounted cash flow valuations in this instance, rather than miss out on outperformance.
These include: improving conversion rates for adults/seniors; earlier intervention for paediatrics; and SSD. Add in the highly prospective N8 launch and the observation thecompany seems to be nabbing more than its fair share of the market, and Wilsons likes what it sees.
On the downside, expense growth jumped 24%, the broker suspecting this may relate to near-term projects.
The buy-back is on hold. Overweight rating retained. Target price rises 15% to $365 from $318.46.
This report was published on February 20, 2024.
Target price is $365.00 Current Price is $341.07 Difference: $23.93
If COH meets the Wilsons target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $258.08, suggesting downside of -24.3%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 420.00 cents and EPS of 594.60 cents.
At the last closing share price the estimated dividend yield is 1.23%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 57.36.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 603.0, implying annual growth of 31.9%.
Current consensus DPS estimate is 417.2, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 56.6.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 470.50 cents and EPS of 675.60 cents.
At the last closing share price the estimated dividend yield is 1.38%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 50.48.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 677.1, implying annual growth of 12.3%.
Current consensus DPS estimate is 470.6, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 50.4.
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DOW DOWNER EDI LIMITED
Industrial Sector Contractors & Engineers - Overnight Price: $5.09
Goldman Sachs rates ((DOW)) as Neutral (3) -
Goldman Sachs highlights risk management and project discipline were more evident in 1H results forDowner EDI, while an additional -$75m of cost-out raises confidence the FY25 margin target will be met.
The earnings (EBIT) margin widened by 30bps (to 2.5%) on the previous corresponding period, and management expects the FY24 margin will be an improvement on the 2.6% achieved in FY23.
The 1H performance of Utilities exceeded the broker's forecast, and management is targeting further 2H improvement as low-margin contracts run-off.
The target rises to $4.80 from $4.20 partly due to the broker's higher earnings forecast, a valuation roll-forward and a lower assumed discount asGoldman's confidence in the turnaround grows.
This report was published on February 16, 2024.
Target price is $4.80 Current Price is $5.09 Difference: minus $0.29 (current price is over target).
If DOW meets the Goldman Sachs target it will return approximately minus 6% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $5.13, suggesting upside of 0.9%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 18.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 3.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.58.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 27.0, implying annual growth of N/A.
Current consensus DPS estimate is 15.5, implying a prospective dividend yield of 3.0%.
Current consensus EPS estimate suggests the PER is 18.9.
Forecast for FY25:
Goldman Sachs forecasts a full year FY25 dividend of 24.00 cents and EPS of 36.00 cents.
At the last closing share price the estimated dividend yield is 4.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.14.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 37.2, implying annual growth of 37.8%.
Current consensus DPS estimate is 21.7, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 13.7.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
DTL DATA#3 LIMITED.
IT & Support - Overnight Price: $7.60
Goldman Sachs rates ((DTL)) as Neutral (3) -
WhileData#3 reported a strong 1H revenue result, largely driven by interest income,Goldman Sachs notes underlying earnings (EBITDA) were softer-than-expected.
The broker highlights demand for networking equipment has softened ascustomers digest the unwind of supply chain constraints in the wake of covid. This headwind is not anticipated to be lasting, given long-term structural tailwinds for spending on the cloud.
Outside of Networking, management commentary was generally positive, in the analyst's opinion, regarding both a recovery forEnd-User-Computer demand, along withongoing strength for Software and Services.
The target falls by -2% to $8.10. Neutral.
This report was published on February 16, 2024.
Target price is $8.10 Current Price is $7.60 Difference: $0.5
If DTL meets the Goldman Sachs target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $8.03, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 25.50 cents and EPS of 27.80 cents.
At the last closing share price the estimated dividend yield is 3.36%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.34.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 28.0, implying annual growth of 16.9%.
Current consensus DPS estimate is 24.6, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 27.1.
Forecast for FY25:
Goldman Sachs forecasts a full year FY25 dividend of 28.40 cents and EPS of 30.90 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.60.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 31.3, implying annual growth of 11.8%.
Current consensus DPS estimate is 27.1, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 24.3.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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