In Case You Missed It – BC Extra Upgrades & Downgrades – 15-03-24

This story features FLIGHT CENTRE TRAVEL GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: FLT

Broker Rating Changes (Post Thursday Last Week)

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FLIGHT CENTRE TRAVEL GROUP LIMITED ((FLT)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0

First half results missed expectations yet Jarden assesses this was overshadowed by market share gains, with FY24 guidance being reiterated along with a FY25 pre-tax profit aspirational margin of 2%.

The broker updates forecasts to allow for disclosure changes, with the net impact being a 5-6% increase in net profit estimates out to FY27.

The business is larger and leaner, with higher returns on investments compared with pre-pandemic levels and Jarden believes this warrants a premium relative to the 16x FY25 EPS currently implied.

Rating is upgraded to Buy from Overweight and the target lifted to $23.50 from $22.00.

RED 5 LIMITED ((RED)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0

Moelis has taken a closer look at the proposed merger of Red 5 and Silver Lake Resources ((SLR)) following the release of half year results from both companies. 

While Red 5 will technically take over Silver Lake Resources, the broker points out key executive roles are being favoured towards Silver Lake. 

The broker expects the balance sheet impediments causing capital constraints at Red 5's King of the Hills site will be removed within twelve months, and believes Silver Lake Resources may have beat other peers to the punch given the strategic merits the site offers. 

The rating is upgraded to Buy and the target price increases to 40 cents from 35 cents.

SAYONA MINING LIMITED ((SYA)) Upgrade to Speculative Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0

Canaccord Genuity sees opportunities for investors with some currently attractive valuations for lithium companies under research coverage. Incumbent producers and low-capex, near-term-development plays are preferred.

The broker now expects minor surpluses for lithium markets over 2024-25 and sees potential for surpluses to swing to deficits, providing pricing upside risk.

While Canaccord's long-term price forecasts remain at US$22,500/t for chemicals and US$1,500/t for concentrate, prices should rally in the 1H of 2024 to around US$16,000/t and US$1,200/t, respectively. 

As these 1H price forecasts are lower than the broker's original forecasts, price targets for developers/explorers and producers under research coverage fall on average by -16% and -11%, respectively.

The 6c target for Sayona Mining is unchanged and the rating is upgraded to Speculative Buy from Hold. 

Downgrade

DGL GROUP LIMITED ((DGL)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0

Canaccord Genuity materially lowers its target for DGL Group to 60c from $1.70 and downgrades its rating to Hold from Speculative Buy after 1H results fell well short of expectations.

Apart from lower earnings forecasts, the analyst's valuation multiple is reduced given volatility for the overall business.

The broker is disappointed by management's FY24 guidance for a year-on-year earnings decline; last year's AGM in November mentioned earnings growth.

Revenue for the half was -25% down on the consensus forecast, while underlying earnings (EBITDA) of $30.3m compared to the forecast for $33m.

All segments, apart from Logistics, missed forecasts, notes the broker. Demand for crop protection products were negatively impacted by forecast drought, which has not materialised.

Management sees a positive demand outlook for chemicals, while warehousing demand is robust and fleet utilisation remains strong.

DUSK GROUP LIMITED ((DSK)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0

Solid performance from Dusk Group's first half says Canaccord Genuity, despite the impact of more cautious customer spending on the period.

The broker notes difficult trading conditions have persisted into the second half, but does expect the retailer to benefit from easier comps.

The broker particularly likes that Dusk Group has maintained relatively tight control over gross margins and per store cost of doing business. 

The rating is downgraded to Hold from Buy, pending improved sales and earnings execution, and the target price decreases to 90 cents from $1.40.

LIGHT & WONDER INC ((LNW)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Light & Wonder provided a strong quarterly outcome with above-industry earnings growth in 2023 of 22%. Jarden believes revenue growth across all the three businesses should lead to the market upgrading estimates and closing the gap on what is achievable.

The broker considers the company a more focused business that continues to grow share via a diversified and incentivised world-class game design team.

Overweight rating, downgraded from Buy following recent outperformance in the share price. Target is raised to $161 from $147.

Order	Company	New Rating	Old Rating	Broker
Upgrade
1	FLIGHT CENTRE TRAVEL GROUP LIMITED	Buy	Buy	Jarden
2	RED 5 LIMITED	Buy	Neutral	Moelis
3	SAYONA MINING LIMITED	Buy	Neutral	Canaccord Genuity
Downgrade
4	DGL GROUP LIMITED	Neutral	Buy	Canaccord Genuity
5	DUSK GROUP LIMITED	Neutral	Buy	Canaccord Genuity
6	LIGHT & WONDER INC	Buy	Buy	Jarden

Price Target Changes (Post Thursday Last Week)

Company		Last Price	Broker	New Target	Old Target	Change
360	Life360	$12.63	Goldman Sachs	14.20	10.50	35.24%
AGY	Argosy Minerals	$0.19	Canaccord Genuity	0.27	0.70	-61.43%
ASX	ASX	$66.74	Jarden	62.10	62.00	0.16%
AZS	Azure Minerals	$3.62	Canaccord Genuity	3.70	3.95	-6.33%
BPT	Beach Energy	$1.66	Wilsons	1.96	1.84	6.52%
CAA	Capral	$9.10	Taylor Collison	N/A	10.97	-100.00%
CAJ	Capitol Health	$0.25	Canaccord Genuity	0.27	0.33	-18.18%
			Jarden	0.27	0.26	3.85%
CMM	Capricorn Metals	$4.85	Jarden	4.77	4.78	-0.21%
CTM	Centaurus Metals	$0.31	Canaccord Genuity	N/A	1.40	-100.00%
CU6	Clarity Pharmaceuticals	$2.73	Wilsons	2.78	N/A	–
DGL	DGL Group	$0.64	Canaccord Genuity	0.60	1.70	-64.71%
DLI	Delta Lithium	$0.33	Canaccord Genuity	0.70	1.20	-41.67%
DSK	Dusk Group	$0.75	Canaccord Genuity	0.90	1.60	-43.75%
DUG	DUG Technology	$2.40	Canaccord Genuity	2.90	2.00	45.00%
ELD	Elders	$8.89	Wilsons	8.26	7.02	17.66%
EOS	Electro Optic Systems	$1.91	Canaccord Genuity	1.95	1.30	50.00%
			Petra Capital	1.14	0.85	34.12%
EVO	Embark Early Education	$0.60	Petra Capital	1.15	1.05	9.52%
FLT	Flight Centre Travel	$21.66	Goldman Sachs	20.10	20.70	-2.90%
			Jarden	23.50	22.00	6.82%
GDG	Generation Development	$1.97	Moelis	2.34	1.97	18.78%
			Petra Capital	2.40	N/A	–
GEM	G8 Education	$1.21	Canaccord Genuity	1.43	1.37	4.38%
GL1	Global Lithium Resources	$0.63	Canaccord Genuity	1.40	2.80	-50.00%
GLN	Galan Lithium	$0.42	Canaccord Genuity	2.25	2.60	-13.46%
GNC	GrainCorp	$8.02	Wilsons	7.28	6.74	8.01%
GT1	Green Technology Metals	$0.17	Canaccord Genuity	0.70	1.90	-63.16%
HVN	Harvey Norman	$4.79	Goldman Sachs	4.30	4.00	7.50%
			Jarden	4.80	3.60	33.33%
INR	ioneer	$0.17	Canaccord Genuity	0.35	0.50	-30.00%
IPD	ImpediMed	$0.11	Canaccord Genuity	0.14	0.21	-33.33%
IR1	Iris Metals	$0.49	Petra Capital	1.67	2.57	-35.02%
JLG	Johns Lyng	$6.21	Canaccord Genuity	8.65	9.25	-6.49%
KAR	Karoon Energy	$1.89	Goldman Sachs	2.38	2.40	-0.83%
KED	Keypath Education International	$0.56	Canaccord Genuity	1.10	0.85	29.41%
LBL	Laserbond	$0.70	Canaccord Genuity	1.25	1.10	13.64%
LLL	Leo Lithium		Canaccord Genuity	0.80	2.00	-60.00%
LNW	Light & Wonder	$153.64	Jarden	161.00	147.00	9.52%
LRS	Latin Resources	$0.23	Canaccord Genuity	0.65	0.70	-7.14%
LTR	Liontown Resources	$1.37	Canaccord Genuity	1.10	1.20	-8.33%
MAQ	Macquarie Technology	$80.00	Canaccord Genuity	90.25	80.00	12.81%
			Petra Capital	89.77	77.50	15.83%
MDR	MedAdvisor	$0.30	Moelis	0.38	0.36	5.56%
MOZ	Mosaic Brands	$0.14	Wilsons	0.16	0.18	-11.11%
MXI	MaxiPARTS	$2.31	Taylor Collison	2.95	3.40	-13.24%
NDO	Nido Education	$0.93	Wilsons	1.47	1.45	1.38%
NXD	NextEd Group	$0.36	Canaccord Genuity	0.70	1.20	-41.67%
PLL	Piedmont Lithium	$0.21	Canaccord Genuity	0.60	1.75	-65.71%
PPG	Pro-Pac Packaging	$0.20	Moelis	0.28	0.38	-26.32%
PPM	Pepper Money	$1.63	Goldman Sachs	1.62	1.45	11.72%
			Jarden	1.60	1.50	6.67%
PPT	Perpetual	$24.39	Jarden	26.90	27.50	-2.18%
PSC	Prospect Resources	$0.08	Canaccord Genuity	0.13	0.16	-18.75%
PTM	Platinum Asset Management	$1.18	Goldman Sachs	1.00	1.12	-10.71%
			Jarden	1.06	1.14	-7.02%
RED	Red 5	$0.37	Moelis	0.40	0.35	14.29%
RHC	Ramsay Health Care	$54.69	Jarden	63.43	61.26	3.54%
			Wilsons	51.61	50.00	3.22%
SDR	SiteMinder	$5.66	Jarden	5.48	5.00	9.60%
SPZ	Smart Parking	$0.43	Canaccord Genuity	0.52	0.50	4.00%
SXL	Southern Cross Media	$0.97	Canaccord Genuity	0.94	1.15	-18.26%
TLX	Telix Pharmaceuticals	$11.54	Wilsons	12.48	12.43	0.40%
TRJ	Trajan Group	$1.04	Canaccord Genuity	1.40	2.25	-37.78%
VUL	Vulcan Energy Resources	$3.49	Canaccord Genuity	11.50	12.50	-8.00%
WC8	Wildcat Resources	$0.72	Canaccord Genuity	1.00	1.15	-13.04%
WGX	Westgold Resources	$2.50	Petra Capital	2.42	2.41	0.41%
WR1	Winsome Resources	$0.95	Canaccord Genuity	1.90	3.00	-36.67%
XRO	Xero	$135.97	Goldman Sachs	152.00	141.00	7.80%
Company		Last Price	Broker	New Target	Old Target	Change

More Highlights

360    LIFE360 INC

Software & Services – Overnight Price: $12.20

Goldman Sachs rates ((360)) as Buy (1) –

Goldman Sachs raises its target for Life360 by 35% to $14.20 after FY23 results demonstrated significant earnings growth and management announced plans to introduce advertising for its free user base. The Buy rating is maintained.

Management's FY24 core revenue guidance seems achievable to the broker, with growth underpinned by monthly active users, International, and the ongoing blended average revenue per paying circle (ARPPC) expansion.

Successful execution on the advertising initiative could represent an inflection point in Life360’s earnings profile, in Goldman's view.

This report was published on March 4, 2024.

Target price is $14.20 Current Price is $12.20 Difference: $2
If 360 meets the Goldman Sachs target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $13.63, suggesting upside of 11.7%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 14.28 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 85.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 1.7, 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 717.6.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 31.14 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 39.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of 1394.1%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 48.0.

This company reports in USD. 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

CY5    CYGNUS METALS LIMITED

Overnight Price: $0.05

Canaccord Genuity rates ((CY5)) as Speculative Buy (1) –

Canaccord Genuity sees opportunities for investors with some currently attractive valuations for lithium companies under research coverage. Incumbent producers and low-capex, near-term-development plays are preferred.

The broker now expects minor surpluses for lithium markets over 2024-25 and sees potential for surpluses to swing to deficits, providing pricing upside risk.

While Canaccord's long-term price forecasts remain at US$22,500/t for chemicals and US$1,500/t for concentrate, prices should rally in the 1H of 2024 to around US$16,000/t and US$1,200/t, respectively. 

As these 1H price forecasts are lower than the broker's original forecasts, price targets for developers/explorers and producers under research coverage fall on average by -16% and -11%, respectively.

The target for Cygnus Metals falls to 30c from 60c and the Speculative Buy rating is unchanged.

This report was published on March 8, 2024.

Target price is $0.30 Current Price is $0.05 Difference: $0.249
If CY5 meets the Canaccord Genuity target it will return approximately 488% (excluding dividends, fees and charges).

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

EVO    EMBARK EARLY EDUCATION LIMITED

Education & Tuition – Overnight Price: $0.58

Petra Capital rates ((EVO)) as Buy (1) –

Petra Capital upgrades forecasts substantially after the 2023 results, which were were ahead of forecasts. Embark Early Education has announced the acquisition of nine highly-accretive childcare centres.

These acquisitions, five in Victoria and four in Queensland, are expected to settle mid-March through to late April and all have high occupancy rates. The price is $25.2m.

As the stock is trading at a significant discount to peers and there is a $20m debt facility for further acquisitions, the broker finds the stock attractive and retains a Buy rating, raising the target 10% to $1.15.

This report was published on February 29, 2024.

Target price is $1.15 Current Price is $0.58 Difference: $0.565
If EVO meets the Petra Capital target it will return approximately 97% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 4.50 cents and EPS of 7.30 cents.
At the last closing share price the estimated dividend yield is 7.69%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.01.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 5.50 cents and EPS of 8.30 cents.
At the last closing share price the estimated dividend yield is 9.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.05.

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

M7T    MACH7 TECHNOLOGIES LIMITED

Healthcare services – Overnight Price: $0.70

Wilsons rates ((M7T)) as Overweight (1) –

Mach7 Technologies largely pre-released its first half results and has maintained downgraded FY24 revenue guidance of $27-30m. Despite the loss of upfront revenue, management's target for cash flow breakeven in FY24 has been retained.

Wilsons expects the share price will be driven by new contracts gained over the remainder of FY24. The following year should represent a step change, as the number of wins in the preceding 12-18 months show up in the profit and loss.

Wilsons maintains an Overweight rating and $1.05 target.

This report was published on March 1, 2024.

Target price is $1.05 Current Price is $0.70 Difference: $0.345
If M7T meets the Wilsons target it will return approximately 49% (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 3.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 19.05.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 2.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 32.05.

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

MXI    MAXIPARTS LIMITED

Automobiles & Components – Overnight Price: $2.20

Taylor Collison rates ((MXI)) as Outperform (2) –

MaxiPARTS has confirmed positive industry conditions are being experienced in the second half and Taylor Collision believes this could be the beginning of a multi-year earnings and margin growth story.

The broker finds the multiples undemanding and while the first half was considered "messy", the true run rate of the business should become visible in the second half and provide a catalyst for re-rating. Outperform and $2.95 target.

This report was published on February 23, 2024.

Target price is $2.95 Current Price is $2.20 Difference: $0.75
If MXI meets the Taylor Collison target it will return approximately 34% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 6.60 cents and EPS of 16.40 cents.
At the last closing share price the estimated dividend yield is 3.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.41.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 8.40 cents and EPS of 21.10 cents.
At the last closing share price the estimated dividend yield is 3.82%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.43.

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

NDO    NIDO EDUCATION LIMITED

Childcare – Overnight Price: $0.93

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

In an endorsement of Nido Education's credentials in child care centre operation, according to Wilsons, Busy Bees has extended its management agreement for the 34 centres managed by Nido.

In a further positive, according to the broker, the extension to June 30 2025 from October 21 2024 means management at Nido now won't be distracted by transition work in mid-2024 during the 2025 enrolment period.

Nido receives a management fee of $100k per year (paid monthly) for each centre, with Busy Bees employing all child care workers.

The broker forecasts marginally higher earnings for Nido as a result of the extended agreement and the target rises to $1.47 from $1.45. The Overweight rating is unchanged.

This report was published on March 7, 2024.

Target price is $1.47 Current Price is $0.93 Difference: $0.54
If NDO meets the Wilsons target it will return approximately 58% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 4.30 cents and EPS of 9.50 cents.
At the last closing share price the estimated dividend yield is 4.62%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.79.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 5.20 cents and EPS of 8.60 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 10.81.

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

PYC    PYC THERAPEUTICS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.09

Wilsons rates ((PYC)) as Initiation of coverage with Overweight (1) –

Wilsons initiates coverage on PYC Therapeutics, believing now is the time for investors to revisit the stock with PYC Therapeutics having undergone a material company and management pivot.

According to the broker, PYC Therapeutics is now focused on the in-house development of its own value accretive therapeutic assets, and 2024 is set to be a seminal year for the company amid its first human clinical data readouts.

Readouts have potential to de-risk assets, and Wilsons sees material opportunity for the company if it can deliver on that front. 

The broker initiates with an Overweight rating and a target price of 39 cents.

This report was published on March 6, 2024.

Target price is $0.39 Current Price is $0.09 Difference: $0.305
If PYC meets the Wilsons target it will return approximately 359% (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 0.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 10.63.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 9.44.

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

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