Weekly Reports | May 03 2024
This story features WESTPAC BANKING CORPORATION, and other companies. For more info SHARE ANALYSIS: WBC
Broker Rating Changes (Post Thursday Last Week)
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WESTPAC BANKING CORPORATION ((WBC)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden anticipates a resilient but muted half for the four bank majors, expecting sector profits to decline -1% half-on-half to $15.6bn as margin erosion and rising costs continue to impact.
While signs of moderating margin pressure will remain a key consideration of the reporting season, the broker is also interested in indications of further returns of excess provisions. Jarden considers it likely each major will announce new capital returns of $1.0-1.5bn.
The broker estimates a -3% half-on-half profit decline from Westpac to $3.44bn. With the bank still undergoing its existing buybacks, Jarden notes Westpac may choose to return capital through special dividends rather than a top up of its buyback.
The rating is upgraded to Overweight from Neutral and the target price increases to $25.70 from $23.50.
Downgrade
KAROON ENERGY LIMITED ((KAR)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Karoon Energy has issued a larger-than-anticipated downgrade to FY24 guidance led by ongoing disappointment from Who Dat. Jarden points out the negative news arrived only four months after the acquisition was completed.
The decision to curtail output due to weak pricing does show the lack of control that resides with Karoon Energy, points out the broker. Jarden suggests the loss of confidence that has now occurred will take time to return.
The rating is downgraded to Overweight from Buy and the target price falls to $2.35 from $2.50.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | WESTPAC BANKING CORPORATION | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 2 | KAROON ENERGY LIMITED | Buy | Buy | Jarden | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| 29M | 29Metals | $0.48 | Jarden | 0.28 | 0.30 | -6.67% |
| AMA | AMA Group | $0.06 | Canaccord Genuity | 0.14 | 0.16 | -12.50% |
| ANZ | ANZ Bank | $28.41 | Jarden | 28.80 | 26.70 | 7.87% |
| BGL | Bellevue Gold | $1.75 | Canaccord Genuity | 2.20 | 2.25 | -2.22% |
| CBA | CommBank | $115.28 | Jarden | 102.00 | 99.00 | 3.03% |
| CMM | Capricorn Metals | $4.81 | Jarden | 5.35 | 5.07 | 5.52% |
| EVS | EnviroSuite | $0.05 | Moelis | 0.09 | 0.10 | -10.00% |
| FMG | Fortescue | $25.74 | Goldman Sachs | 16.90 | 19.60 | -13.78% |
| GDG | Generation Development | $2.25 | Petra Capital | 2.46 | 2.40 | 2.50% |
| GOR | Gold Road Resources | $1.61 | Canaccord Genuity | 2.05 | 2.10 | -2.38% |
| ILU | Iluka Resources | $7.76 | Canaccord Genuity | 7.40 | 7.00 | 5.71% |
| Goldman Sachs | 9.90 | 9.20 | 7.61% | |||
| KAR | Karoon Energy | $1.91 | Jarden | 2.35 | 2.50 | -6.00% |
| KGN | Kogan.com | $4.76 | Canaccord Genuity | 8.00 | 9.00 | -11.11% |
| LIC | Lifestyle Communities | $12.29 | Goldman Sachs | 18.45 | 21.55 | -14.39% |
| Moelis | 18.90 | 20.00 | -5.50% | |||
| LYC | Lynas Rare Earths | $6.56 | Canaccord Genuity | 7.00 | 6.90 | 1.45% |
| NAB | National Australia Bank | $34.30 | Jarden | 33.80 | 31.50 | 7.30% |
| NST | Northern Star Resources | $14.55 | Goldman Sachs | 14.50 | 13.30 | 9.02% |
| Jarden | 14.10 | 13.70 | 2.92% | |||
| PLS | Pilbara Minerals | $4.18 | Goldman Sachs | 2.80 | 2.90 | -3.45% |
| Jarden | 4.10 | 4.14 | -0.97% | |||
| PLT | Plenti Group | $0.66 | Wilsons | 1.20 | 1.05 | 14.29% |
| PMT | Patriot Battery Metals | $0.78 | Canaccord Genuity | 1.70 | N/A | – |
| PPS | Praemium | $0.47 | Canaccord Genuity | 0.86 | 0.81 | 6.17% |
| RED | Red 5 | $0.43 | Moelis | 0.50 | 0.48 | 4.17% |
| RMD | ResMed | $33.25 | Wilsons | 36.00 | 32.90 | 9.42% |
| RMS | Ramelius Resources | $1.96 | Canaccord Genuity | 2.60 | 2.65 | -1.89% |
| S32 | South32 | $3.58 | Goldman Sachs | 3.70 | 3.80 | -2.63% |
| SDV | SciDev | $0.33 | Canaccord Genuity | 0.54 | 0.42 | 28.57% |
| SHV | Select Harvests | $3.52 | Wilsons | 5.39 | 5.53 | -2.53% |
| STX | Strike Energy | $0.23 | Wilsons | 0.33 | 0.34 | -2.94% |
| WBC | Westpac | $26.23 | Jarden | 25.70 | 23.50 | 9.36% |
| WDS | Woodside Energy | $27.18 | Jarden | 29.25 | 30.00 | -2.50% |
| WGX | Westgold Resources | $2.16 | Petra Capital | 2.66 | 2.68 | -0.75% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
BXB BRAMBLES LIMITED
Transportation & Logistics – Overnight Price: $14.28
Jarden rates ((BXB)) as Overweight (2) –
Jarden assesses that the market is too concerned about the revenue momentum for Brambles post the 3Q24 trading update.
The analyst highlights a slowing in revenue growth to 2.3% over the quarter, compared to 10% in the 1H24 and 7% for the 9 months ending March, but emphasises that the 'slowdown' in the pallet return rate is a positive for the company.
Management has retained FY24 guidance with an expected pick up in 4Q24 revenues, seasonally a stronger period for Brambles.
Jarden makes no changes to FY24 forecasts, however the analyst considers the market is ignoring potential positives from in-period pricing going into FY25.
A Buy rating and $15.70 target are unchanged.
This report was published on April 23, 2024.
Target price is $15.70 Current Price is $14.28 Difference: $1.42
If BXB meets the Jarden target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $15.44, suggesting upside of 8.1%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 72.96 cents and EPS of 81.95 cents.
At the last closing share price the estimated dividend yield is 5.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 17.43.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 89.0, implying annual growth of N/A.
Current consensus DPS estimate is 48.7, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 16.0.
Forecast for FY25:
Jarden forecasts a full year FY25 dividend of 81.04 cents and EPS of 90.48 cents.
At the last closing share price the estimated dividend yield is 5.67%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.78.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 99.6, implying annual growth of 11.9%.
Current consensus DPS estimate is 55.5, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 14.3.
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MAC METALS ACQUISITION LIMITED
Copper – Overnight Price: $21.00
Wilsons rates ((MAC)) as Overweight (1) –
Wilsons had only initiated coverage on Metals Acquisition with an Overweight rating and $25 target price in mid-April.
The company announced a significant 67% increase in resources and reserves at the CSA mine, underpinning an updated 11-year mine plan that nearly doubles the previous life based on reserves alone.
The broker points out, Metals Acquisition now boasts around 500kt of contained copper, with expectations for further increases from additional high-grade resources.
Overweight. Wilsons sees Metals Acquisition as a top pick in the copper sector, expecting substantial exploration success and operational expansion. Target $25 (unchanged).
This report was published on April 24, 2024.
Target price is $25.00 Current Price is $21.00 Difference: $4
If MAC meets the Wilsons target it will return approximately 19% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 77.67 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.04.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 125.34 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.75.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PLT PLENTI GROUP LIMITED
Business & Consumer Credit – Overnight Price: $0.67
Wilsons rates ((PLT)) as Overweight (1) –
On Wilsons' assessment, Plenti Group's Q4 trading result revealed a notable outperformance in Cash NPAT at $4.6m for 2H24, driven by healthy Net Interest Margins (NIM) and reduced loan losses.
Originations grew 3.7% year-over-year to $286.0m, and the loan book expanded 21.1% to $2.1bn. The broker states the upcoming FY25 looks promising due to improved industry pricing dynamics following Macquarie Group’s ((MQG)) exit from automotive lending, which is expected to support NIM expansion for Plenti Group.
Also, the first product from the strategic partnership with National Australia Bank ((NAB)) is set to launch in June, which may further bolster growth.
Wilsons retains an Overweight rating with a raised target price of $1.20, reflecting upgraded forecasts for FY24 and FY25.
This report was published on April 24, 2024.
Target price is $1.20 Current Price is $0.67 Difference: $0.53
If PLT meets the Wilsons target it will return approximately 79% (excluding dividends, fees and charges).
The company's fiscal year ends in March.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.50 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 134.00.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.90 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 74.44.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SDV SCIDEV LIMITED
Industrial Sector Contractors & Engineers – Overnight Price: $0.36
Canaccord Genuity rates ((SDV)) as Speculative Buy (1) –
SciDev reported revenue of $29m in the March quarter, up 38% year-on-year, and continues to generate more than 100% earnings growth this year. Canaccord Genuity described the period as an impressive quarter for the company.
The broker considers SciDev to have substantial ESG tailwinds given its water and waste solutions, particularly in the wake of acceleration of the global PFAS treatment industry following the introduction of new regulations in the US.
As per Canaccord Genuity, the outlook appears upbeat.
The Speculative Buy rating is retained and the target price increases to 54 cents from 42 cents.
This report was published on April 22, 2024.
Target price is $0.54 Current Price is $0.36 Difference: $0.18
If SDV meets the Canaccord Genuity target it will return approximately 50% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 20.00.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.61.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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For more info SHARE ANALYSIS: KAR - KAROON ENERGY LIMITED
For more info SHARE ANALYSIS: WBC - WESTPAC BANKING CORPORATION