Australian Broker Call *Extra* Edition – Feb 28, 2024

Daily Market Reports | Feb 28 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)

ALD   BEN   BSL   EHL   EVS   HUB   MAD   MAH   MMS   NDO (3)   NWL   OML   ORA   STX   THL   WBC   WDS  

STX    STRIKE ENERGY LIMITED

NatGas - Overnight Price: $0.21

Wilsons rates ((STX)) as Overweight (1) -

Wilsons lowers its resource estimates for Strike Energy's South Erregulla and flow rate expectations by around -50% after flow test issues at SE-2, following SE-3 flow test issues in the prior week. 

Water has been prohibiting commercial gas flow from both these wells due to causes unknown at this juncture, explains the broker.

The analyst not only downgrades its South Erregulla asset resource and flow rate expectations, but also increases the risk realating to potential upside to the asset and neighbouring prospects.

The Overweight rating is retained for Strike Energy though the target is slashed to 34c from 53c.

This report was published on February 21, 2024.

Target price is $0.34 Current Price is $0.21 Difference: $0.13
If STX meets the Wilsons target it will return approximately 62% (excluding dividends, fees and charges).
Current consensus price target is $0.39, suggesting upside of 87.3%(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 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 0.6, 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 35.0.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 1.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.7, implying annual growth of 183.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 12.4.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

THL    TOURISM HOLDINGS LIMITED

Travel, Leisure & Tourism - Overnight Price: $3.28

Wilsons rates ((THL)) as Overweight (1) -

While 1H results for Tourism Holdings Rentals were weaker than Wilsons expected, partly due to a challenging environment for global sales, the company reiterated its $100m FY26 profit target.

Additionally, management stated this target allows for a full normalisation in sales margins to pre-covid levels and a level of normalisation for rental yields. Further, the company noted it is on track to deliver targeted cash synergies of $27-31m.

Management lowered FY24 profit guidance to “around $75m” compared to previous expectations for an increase from the $77.1m achieved in FY23.

The broker decreases its target to $4.05 from $5.06 on lower earnings forecasts and after applying a higher weighting to its price earnings valuation model, which is used alongside the discounted cash flow methodology. The Overweight rating is unchanged.

This report was published on February 21, 2024.

Target price is $4.05 Current Price is $3.28 Difference: $0.77
If THL meets the Wilsons target it will return approximately 23% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 14.83 cents and EPS of 32.35 cents.
At the last closing share price the estimated dividend yield is 4.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.14.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 16.96 cents and EPS of 35.78 cents.
At the last closing share price the estimated dividend yield is 5.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.17.

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

WBC    WESTPAC BANKING CORPORATION

Banks - Overnight Price: $26.25

Goldman Sachs rates ((WBC)) as Neutral (3) -

Following Westpac's 1Q trading update, Goldman Sachs raises its FY24-26 EPS forecasts by 2.7%, 3.2% and 3.2%, respectively, due to a better net interest margin (NIM) and lower expenses. Lower volumes and a higher assumed BDD charge provide a partial offset.

After also reviewing the recent 1H results for Bendigo & Adelaide Bank ((BEN)), the broker believes signs are emerging of an easing for industry-wide NIM pressures.

Goldman's target rises to $23.46 from $22.85. Neutral.

This report was published on February 20, 2024.

Target price is $23.46 Current Price is $26.25 Difference: minus $2.79 (current price is over target).
If WBC meets the Goldman Sachs target it will return approximately minus 11% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $23.42, suggesting downside of -10.8%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 144.00 cents and EPS of 186.90 cents.
At the last closing share price the estimated dividend yield is 5.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.04.

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 5.5%.
Current consensus EPS estimate suggests the PER is 13.9.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 144.00 cents and EPS of 185.10 cents.
At the last closing share price the estimated dividend yield is 5.49%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.18.

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 5.5%.
Current consensus EPS estimate suggests the PER is 13.8.

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

WDS    WOODSIDE ENERGY GROUP LIMITED

NatGas - Overnight Price: $30.28

Goldman Sachs rates ((WDS)) as Neutral (3) -

Goldman Sachs resumes research coverage for Woodside Energy, after failed merger talks with Santos ((STO)), with a Neutral rating and $32.40 target.

The broker expects production will remain relatively flat over 2024-2026 as Mad Dog 2 and the Sangomar oil ramp-up offset the existing decline at the North West Shelf and Bass Strait

The analyst points out this change in project mix leaves earnings largely exposed to softening LNG prices. 

This report was published on February 20, 2024.

Target price is $32.40 Current Price is $30.28 Difference: $2.12
If WDS meets the Goldman Sachs target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $33.50, suggesting upside of 10.6%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 115.38 cents and EPS of 144.22 cents.
At the last closing share price the estimated dividend yield is 3.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 220.3, implying annual growth of N/A.
Current consensus DPS estimate is 169.7, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 13.7.

Forecast for FY25:

Current consensus EPS estimate is 161.4, implying annual growth of -26.7%.
Current consensus DPS estimate is 110.8, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 18.8.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.0
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.