Australian Broker Call *Extra* Edition – Mar 20, 2024

Daily Market Reports | Mar 20 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)

AGN   ALC   ARU   BRE (2)   CLV   CMM   CTM   CWY   CXO (3)   DLI   DRE   EMN   EVN   GNX   GOR   HAS   ILU   LEL   LIN   LNW   LOT   LTR (2)   LYC   MEI   MTS (2)   NST   NTU   NXD   PEK   RMS   TIE   TLS   TWE   VHM   WDS  

TIE    TIETTO MINERALS LIMITED

Gold & Silver - Overnight Price: $0.61

Canaccord Genuity rates ((TIE)) as Speculative Buy (1) -

Canaccord Genuity points to the incongruity of recent record highs for both Australian dollar and US dollar gold prices and the ASX Gold Index which is currently around -13% below the 52-week high.

In a similar vein, gold companies under research coverage by the broker are all trading below their respective 52-week highs at an average discount of around -18%.

In selecting appropriate company exposures, the broker prefers those either in, or entering a free cash flow (FCF) harvest period. In the screening process, favourable mining jurisdictions and reasonable liquidity/market capitalisation were also looked upon favourably.

Canaccord prefers Buy-rated Perseus Mining, Regis Resources and Ramelius Resources. Bellevue Gold, which is on the cusp of commercial production, is also recommended as a Speculative Buy.

For Tietto Minerals, the broker has a Speculative Buy rating and 80c target price.

This report was published on March 13, 2024.

Target price is $0.80 Current Price is $0.61 Difference: $0.185
If TIE meets the Canaccord Genuity target it will return approximately 30% (excluding dividends, fees and charges).

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

TLS    TELSTRA GROUP LIMITED

Telecommunication - Overnight Price: $3.78

Jarden rates ((TLS)) as Buy (1) -

Telstra Group is set for a review of its network, application and services (NAS) business, following a deterioration in operation conditions.

Despite the company's previous ambitions to grow the segment's earnings margins to mid-teens, Jarden is anticipating a potential -$100m earnings loss could be reported for FY24. 

It is the broker's view that in the short term headcount reductions are a way to extract costs, while medium-term product exits and a simplified operating model could be an option. 

Jarden also believes a strategic review of prior acquisitions and a commitment to better use of capital is required. The Buy rating and target price of $4.40 are retained.

This report was published on March 11, 2024.

Target price is $4.40 Current Price is $3.78 Difference: $0.62
If TLS meets the Jarden target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $4.38, suggesting upside of 15.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 18.00 cents and EPS of 17.00 cents.
At the last closing share price the estimated dividend yield is 4.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.3, implying annual growth of 9.6%.
Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 4.7%.
Current consensus EPS estimate suggests the PER is 20.8.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 20.00 cents and EPS of 19.40 cents.
At the last closing share price the estimated dividend yield is 5.29%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 19.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.8, implying annual growth of 8.2%.
Current consensus DPS estimate is 18.8, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 19.2.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

TWE    TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco - Overnight Price: $12.35

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

Treasury Wine Estates announced on March 12 that China had proposed the removal of the current tariffs on Australian import wines and that the company anticipates a final determination in the coming weeks.

Management highlighted that if the import tariffs are removed, the impact to FY24 earnings would be minimal (there are not many months left for the year).

Goldman Sachs sees it as a positive catalyst for Treasury Wine as it signals the reopening of a significant, high profit market, in which Penfolds still holds strong brand equity.

Buy and $12.60 target retained.

This report was published on March 13, 2024.

Target price is $12.60 Current Price is $12.35 Difference: $0.25
If TWE meets the Goldman Sachs target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $13.10, suggesting upside of 4.8%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 34.00 cents and EPS of 51.00 cents.
At the last closing share price the estimated dividend yield is 2.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 24.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.6, implying annual growth of 50.7%.
Current consensus DPS estimate is 35.2, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 23.8.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 42.00 cents and EPS of 59.00 cents.
At the last closing share price the estimated dividend yield is 3.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.93.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 63.5, implying annual growth of 20.7%.
Current consensus DPS estimate is 42.5, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 19.7.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

VHM    VHM LIMITED

Mineral Sands - Overnight Price: $0.52

Canaccord Genuity rates ((VHM)) as Speculative Buy (1) -

Price targets across Canaccord Genuity's global rare earths (RE) coverage fall by -15% on average. This comes as the broker lowers its long-term neodymium and praseodymium (NdPr) price to US$120/kg from US$135/kg, and models smaller deficits through to 2030.

Challenging market conditions for NdPr have persisted in early-2024, with the economic recovery anticipated in China yet to materialise and further increases in Chinese production quotas, explain the analysts.

ASX-listed rare earth equities are down on average by -40% in the last year, notes the broker. Preferred exposures include those with near-term catalyst potential, such as exploration finds, positive funding outcomes, offtake agreements and approvals.

The target for VHM falls to $1.20 from $1.40 and the Speculative Buy rating is unchanged.

This report was published on March 13, 2024.

Target price is $1.20 Current Price is $0.52 Difference: $0.68
If VHM meets the Canaccord Genuity target it will return approximately 131% (excluding dividends, fees and charges).

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: $30.25

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

As outlined in its Climate Transition Action Plan, Woodside Energy appears well place to meet its 2030 emissions reduction target.

Jarden points out not only does the company have access to 20m tonnes of low cost carbon credits, but it has also committed to projects that avoid and reduce emissions by 28m tonnes of carbon equivalent. 

The broker believes the company should be focusing on its post-2030 reduction ambitions, noting these will likely require expensive investment in carbon capture and power generation technologies.

With Woodside Energy estimating these projects will cost in excess of $80 per tonne, Jarden expects bringing costs down is critical to sanctioning projects.

The Neutral rating and target price of $29.00 are retained.

This report was published on March 13, 2024.

Target price is $29.00 Current Price is $30.25 Difference: minus $1.25 (current price is over target).
If WDS meets the Jarden target it will return approximately minus 4% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $33.53, suggesting upside of 9.8%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 171.68 cents and EPS of 215.74 cents.
At the last closing share price the estimated dividend yield is 5.68%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 197.4, implying annual growth of N/A.
Current consensus DPS estimate is 155.5, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 15.5.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 185.35 cents and EPS of 233.52 cents.
At the last closing share price the estimated dividend yield is 6.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 12.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 177.3, implying annual growth of -10.2%.
Current consensus DPS estimate is 130.1, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 17.2.

This company reports in USD. 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

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.