Australian Broker Call *Extra* Edition – Feb 26, 2024

Daily Market Reports | Feb 26 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)

ARB   BBN   BEN   BLD   BSL   BVS   CNI   COH   EVS   GDI   GPT   GQG   HUB   IAG   IDX   IGO   IMD   ORA   QBE   QIP   RWC   WBC  

QBE    QBE INSURANCE GROUP LIMITED

Insurance - Overnight Price: $16.85

Goldman Sachs rates ((QBE)) as Buy (1) -

Post QBE Insurance's  FY23 earnings result, Goldman Sachs retains an upbeat view of the company.

The broker is expecting pricing will remain robust into FY24 and considers management's guidance as conservative given the earnings trend ex catastrophe.

A 16% return on equity was achieved in FY23 due to strong capital generation.

Some minor adjustments to EPS forecasts are made.

With a non demanding  PER valuation, circa 9.0x for FY24, a Buy rating is retained.

Price target is lifted to $18.65 from $18.52.

This report was published on February 19, 2024.

Target price is $18.65 Current Price is $16.85 Difference: $1.8
If QBE meets the Goldman Sachs target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $17.81, suggesting upside of 5.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 94.11 cents and EPS of 185.19 cents.
At the last closing share price the estimated dividend yield is 5.59%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 174.1, implying annual growth of N/A.
Current consensus DPS estimate is 128.5, implying a prospective dividend yield of 7.6%.
Current consensus EPS estimate suggests the PER is 9.7.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 92.59 cents and EPS of 183.67 cents.
At the last closing share price the estimated dividend yield is 5.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 188.3, implying annual growth of 8.2%.
Current consensus DPS estimate is 140.3, implying a prospective dividend yield of 8.3%.
Current consensus EPS estimate suggests the PER is 8.9.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

QIP    QANTM INTELLECTUAL PROPERTY LIMITED

Legal - Overnight Price: $1.15

Petra Capital rates ((QIP)) as Buy (1) -

Qantm Intellectual Property's pre-guided December-half result appears to have pleased Petra Capital, revenue and earnings all rising strongly on the previous corresponding period, thanks to "respectable" performances across divisions.

The broker observes strong operating cash generation and low capital expenditure drove an increase in the company's dividend to 4.9c from 2.8c the previous year (an 80% payout ratio). The broker forecasts an FY24 dividend yield of 6.3% and FY25 yield of 7.2%.

Net debt fell -33.4% year on year. Buy rating retained. Target price is $1.76 (it was $1.57 in December). 

This report was published on February 21, 2024.

Target price is $1.76 Current Price is $1.15 Difference: $0.61
If QIP meets the Petra Capital target it will return approximately 53% (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 6.10 cents and EPS of 12.80 cents.
At the last closing share price the estimated dividend yield is 5.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.98.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 7.50 cents and EPS of 13.40 cents.
At the last closing share price the estimated dividend yield is 6.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.58.

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

RWC    RELIANCE WORLDWIDE CORP. LIMITED

Building Products & Services - Overnight Price: $5.27

Jarden rates ((RWC)) as Upgrade to Overweight from Neutral (2) -

A better than expected first half result from Reliance Worldwide, with adjusted earnings a 3% beat to market forecasts.

Guidance was broadly retained, but Jarden points out risk balance has shifted from downside in European operations to upside in US operations. Some risk remains in Europe, but the broker found the manufacturing shift and improved cash flows encouraging.

The company also improved its leverage to both the US and Australian markets, successfully transferring its manufacturing footprint to the US. The broker considers Reliance Worldwide better placed to handle near-term uncertainty.

The rating is upgraded to Overweight from Neutral and the target price increases to $5.30 from $4.10.

This report was published on February 20, 2024.

Target price is $5.30 Current Price is $5.27 Difference: $0.03
If RWC meets the Jarden target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $5.08, suggesting downside of -3.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 6.83 cents and EPS of 24.44 cents.
At the last closing share price the estimated dividend yield is 1.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 29.0, implying annual growth of N/A.
Current consensus DPS estimate is 10.1, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 18.2.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 6.83 cents and EPS of 29.60 cents.
At the last closing share price the estimated dividend yield is 1.30%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 33.4, implying annual growth of 15.2%.
Current consensus DPS estimate is 11.0, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 15.8.

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

WBC    WESTPAC BANKING CORPORATION

Banks - Overnight Price: $25.94

Jarden rates ((WBC)) as Neutral (3) -

Despite describing Westpac's first quarter result as 'messy', Jarden found the underlying operational performance solid. The broker points out core net interest margins of 1.8% are tracking 1-2 basis points better than expected, suggestive of an upcoming 'beat' from the bank.

The broker has lifted its first half net interest margins by 3 basis points to 1.90%, lifting FY24 and FY25 earnings forecasts by 1.8% and 1.3% respectively, largely on better margins and higher markets income.

The Overweight rating is retained and the target price increases to $23.50.

This report was published on February 20, 2024.

Target price is $23.50 Current Price is $25.94 Difference: minus $2.44 (current price is over target).
If WBC meets the Jarden target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $23.42, suggesting downside of -9.7%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 142.00 cents and EPS of 183.80 cents.
At the last closing share price the estimated dividend yield is 5.47%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.11.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 188.7, implying annual growth of -8.1%.
Current consensus DPS estimate is 144.4, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 143.00 cents and EPS of 185.60 cents.
At the last closing share price the estimated dividend yield is 5.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 190.3, implying annual growth of 0.8%.
Current consensus DPS estimate is 144.8, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 13.6.

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

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide experienced, intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface.

This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.