Weekly Reports | May 17 2024
Broker Rating Changes (Post Thursday Last Week)
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COLLINS FOODS LIMITED ((CKF)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden raises its target for Collins Foods to $10.25 from $10.00 and upgrades the rating to Overweight from Neutral. The company's shares have underperformed peers and the ASX200 by around -15% and -17%, respectively, over the past three months.
For FY25, the broker anticipates input costs will ease, particularly for feed and energy (Germany), and notes the significant roll-out plans by the new KFC master franchisee in Germany.
Also, the analysts believe around $20bn of tax cuts from July 1 should disproportionately benefit the quick service restaurant (QSR) category.
G8 EDUCATION LIMITED ((GEM)) Buy by Moelis.B/H/S: 0/0/0
G8 Education reported a year-to-date increase in occupancy of 1.1% as of April 28, 2024, and a spot occupancy increase of 1.3% compared to the previous year at the AGM trading update.
Cost management remains strong, particularly in wage rostering and reduced agency usage, notes Moelis.
The company has exited 17 centres this year, which, the broker points out, have been a drain on earnings and an additional 14 centres are slated for divestment.
Moelis has adjusted its core occupancy growth forecast for 2024 and EPS forecasts for FY24 and FY25 have been revised by -2.5% and -1.5%, respectively.
As per the broker, G8 Education is focusing on further improving occupancy and daily fee growth, along with additional labour efficiencies, to drive EBIT margin uplift from 10.3% in 2023 to 12%-15% in the medium term.
Buy rating and $1.43 target retained.
QUBE HOLDINGS LIMITED ((QUB)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Qube Holdings upgraded FY24/FY25 guidance of 10%-15% growth compared to 5%-10% previously.
Strength is being generated from NZ Forestry and Agriculture. Patrick remains robust although Jarden points to some possible risks to Bulk Commodities.
The broker's FY24/FY25 EPS are upgraded by 3%.
The rating is raised to Buy from Overweight and the target lifted to $3.70 from $3.60.
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QANTM INTELLECTUAL PROPERTY LIMITED ((QIP)) Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Qantm Intellectual Property has received a new acquisition proposal from IPH Ltd ((IPH)), challenging the existing bid from Adamantem.
Petra Capital assesses the new offer of $0.291 IPH shares plus a fully franked special dividend of $0.11 per Qantm Intellectual Property share, values the offer at $1.90 per share as at May 7.
This bid is approximately 4.6% higher than Adamantem's all-cash offer of $1.817 per share.
The proposed acquisition is subject to approval from both the Australian Competition and Consumer Commission (ACCC) and the New Zealand Commerce Commission due to potential market share concerns given the size of IPH Ltd.
Rating downgraded to Hold from Buy with a $1.76 target.
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