Australian Broker Call *Extra* Edition – May 29, 2024

This story features EAGERS AUTOMOTIVE LIMITED, and other companies. For more info SHARE ANALYSIS: APE

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)

APE   ARX   AUB (2)   CGF   FPH   IFT   LRS   MDR   NAB   NXD   RRL   S32   VIT   VUL   WBC   WC8   WEB (2)   XRO  

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $10.44

Canaccord Genuity rates ((APE)) as Buy (1) –

A weaker-than-expected guidance from its AGM has forced analysts at Canaccord Genuity to reduce forecasts for Eagers Automotive, resulting in the broker's the price target dropping to $11.70 from $16.10.

Despite 1H24 revenue growth of 18.3%, pre-tax profit is expected to be approximately $176m, down -15% from the prior corresponding period.

The broker highlighted challenges including cyclical weakness and BYD inventory issues, though a recovery is anticipated in 2H24. Forecast EPS for FY24 is lowered to 96.8c from 122.3c, and FY25 to 87.1c from 116.7c.

The broker has maintained its Buy rating.

This report was published on May 23, 2024.

Target price is $11.70 Current Price is $10.44 Difference: $1.26
If APE meets the Canaccord Genuity target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $12.62, suggesting upside of 20.9%(ex-dividends)
The company's fiscal year ends in December.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 60.00 cents and EPS of 96.80 cents.
At the last closing share price the estimated dividend yield is 5.75%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.79.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 100.3, implying annual growth of -9.4%.
Current consensus DPS estimate is 69.7, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 10.4.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 57.00 cents and EPS of 87.10 cents.
At the last closing share price the estimated dividend yield is 5.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 85.4, implying annual growth of -14.9%.
Current consensus DPS estimate is 69.8, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 12.2.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.52

Canaccord Genuity rates ((ARX)) as Buy (1) –

As the FY24 results were in line with expectations, showing a total revenue of NZ$69.1m and an EBITDA loss of -NZ$3.1m, Canaccord Genuity has retained its Buy rating for Aroa Biosurgery with an unchanged price target of $1.

As per the broker's comments, strong Myriad sales growth of 73% was noted, though OviTex sales were down -7% YoY. The broker anticipates FY25 to be Aroa’s first profitable year, driven by increased sales productivity and scale, with an expected revenue range of NZ$80-87m.

FY25 EBITDA forecast has been adjusted to NZ$2.4m from NZ$4.3m and FY26 to NZ$14.0m from NZ$11.0m.

This report was published on May 23, 2024.

Target price is $1.00 Current Price is $0.52 Difference: $0.48
If ARX meets the Canaccord Genuity target it will return approximately 92% (excluding dividends, fees and charges).
The company's fiscal year ends in March.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.37 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 140.54.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 1.94 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 26.79.

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

AUB    AUB GROUP LIMITED

Insurance – Overnight Price: $28.64

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

AUB Group reported a $200m equity raise, plus a possible $25m SPP, to fund the proposed acquisition of 70% of Pacific Indemnity for -$105m upfront and -$35m in deferred consideration, notes Goldman Sachs.

The acquisition is valued at an implied EV/EBIT multiple of 13x and is expected to enhance the company's financial lines capability and leverage cross-selling opportunities through its broker network, according to the analyst.

Financial forecasts remain unchanged, pending acquisition completion expected on 1 July 2024.

Buy rating and $32.50 target unchanged.

This report was published on May 22, 2024.

Target price is $32.50 Current Price is $28.64 Difference: $3.86
If AUB meets the Goldman Sachs target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $34.72, suggesting upside of 21.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 79.00 cents and EPS of 155.00 cents.
At the last closing share price the estimated dividend yield is 2.76%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.48.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 154.6, implying annual growth of 136.5%.
Current consensus DPS estimate is 75.2, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 18.5.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 89.00 cents and EPS of 171.00 cents.
At the last closing share price the estimated dividend yield is 3.11%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 169.6, implying annual growth of 9.7%.
Current consensus DPS estimate is 96.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 16.9.

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

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Jarden rates ((AUB)) as Overweight (2) –

AUB Group announced the acquisition of a 70% stake in Pacific Indemnity for -$140m, funded by a $200m equity raise and a potential $25m SPP.

The deal is expected to be EPS neutral for FY24 but positive in FY25, as synergies and additional M&A opportunities are realised, according to Jarden.

Earnings forecasts are.slightly reduced by -0.1%  for FY24 and -1.1% for FY25.

Overweight rating and $33.85 target retained.

This report was published on May 22, 2024.

Target price is $33.85 Current Price is $28.64 Difference: $5.21
If AUB meets the Jarden target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $34.72, suggesting upside of 21.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 82.00 cents and EPS of 157.20 cents.
At the last closing share price the estimated dividend yield is 2.86%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 154.6, implying annual growth of 136.5%.
Current consensus DPS estimate is 75.2, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 18.5.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 98.00 cents and EPS of 178.10 cents.
At the last closing share price the estimated dividend yield is 3.42%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 16.08.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 169.6, implying annual growth of 9.7%.
Current consensus DPS estimate is 96.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 16.9.

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

CGF    CHALLENGER LIMITED

Wealth Management & Investments – Overnight Price: $6.70

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

Challenger management announced the extension of the reinsurance partnership with MS Primary for five years at around $500m p.a. and the company noted this supports longer duration new business/quality of growth and stronger returns.

Goldman Sachs is more circumspect and highlighted the margin implications are unclear, but the broker believes the deal might have been struck on similar terms to the existing agreement.

No changes to the broker's earnings forecasts.

Buy rating and $7.50 target price.

This report was published on May 22, 2024.

Target price is $7.50 Current Price is $6.70 Difference: $0.8
If CGF meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $7.40, suggesting upside of 10.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 25.60 cents and EPS of 61.00 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 10.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 46.3, implying annual growth of 9.8%.
Current consensus DPS estimate is 26.3, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 14.5.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 27.20 cents and EPS of 68.00 cents.
At the last closing share price the estimated dividend yield is 4.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 59.6, implying annual growth of 28.7%.
Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 4.2%.
Current consensus EPS estimate suggests the PER is 11.2.

Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

FPH    FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED

Medical Equipment & Devices – Overnight Price: $25.45

Jarden rates ((FPH)) as Underweight (4) –

Prior to Fisher & Paykel Healthcare reporting FY24 financials (earlier tis morning) Jarden noted revenue is projected at NZ$1.73bn, with net profit expected between NZ$260-NZ$265m, driven by stronger hospital consumables sales assisted by a robust performance from the Evora mask.

Management's FY25 guidance stands at 13% growth in revenue to NZ$1.96bn, with a 160 basis point improvement in gross margin to approximately 62%, highlights the analyst.

Jarden remains cautious due to the ongoing investment in manufacturing capacity and salesforce education, as well as awaiting pricing improvements and manufacturing efficiencies.

The Underweight rating is retained with a NZ$23.20 target price.

This report was published on May 22, 2024.

Current Price is $25.45. Target price not assessed.
Current consensus price target is $22.10, suggesting downside of -13.2%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 38.35 cents and EPS of 42.05 cents.
At the last closing share price the estimated dividend yield is 1.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 60.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.4, implying annual growth of N/A.
Current consensus DPS estimate is 37.6, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 63.0.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 39.28 cents and EPS of 51.10 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 49.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 52.8, implying annual growth of 30.7%.
Current consensus DPS estimate is 38.7, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 48.2.

This company reports in NZD. 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

IFT    INFRATIL LIMITED

Wealth Management & Investments – Overnight Price: $10.08

Jarden rates ((IFT)) as Overweight (2) –

According to Jarden, Infratil reported better than expected FY24 EBITDA of NZ$864.1m, above the guidance range and both internal and consensus forecasts, driven by full consolidation of One NZ and growth in CDC.

Management's FY25 like-for-like EBITDA guidance was well below consensus and the analyst's estimates, due to flat expectations for One NZ and below CDC earnings.

Despite this, management remains confident in CDC's EBITDA growth rates accelerating from FY26, meeting the broker's estimates of 30%-40%p.a. from 25% in FY25.

The analyst's earnings forecasts are adjusted materially for FY25 and FY26.

Overweight rating is maintained and the target price raised to NZ$11.50 from NZ$11.30.

This report was published on May 22, 2024.

Current Price is $10.08. Target price not assessed.
The company's fiscal year ends in March.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 19.41 cents and EPS of 3.42 cents.
At the last closing share price the estimated dividend yield is 1.93%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 294.82.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 20.33 cents and EPS of 9.33 cents.
At the last closing share price the estimated dividend yield is 2.02%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 107.99.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

LRS    LATIN RESOURCES LIMITED

Mining – Overnight Price: $0.25

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

Canaccord Genuity analysts have retained their Speculative Buy rating for Latin Resources with price target unchanged at $0.65.

The broker highlights recent resource drilling at the Colina project supports potential for an uplift in measured and indicated resources.

The broker sees significant improvement on the horizon with FY25 EBITDA forecasted at $49.0m.

Financial forecasts have been revised, reflecting the updated drilling results and expected project advancements.

This report was published on May 23, 2024.

Target price is $0.65 Current Price is $0.25 Difference: $0.4
If LRS meets the Canaccord Genuity target it will return approximately 160% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.00 cents.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.00 cents.

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

MDR    MEDADVISOR LIMITED

Healthcare services – Overnight Price: $0.43

Canaccord Genuity rates ((MDR)) as Buy (1) –

Canaccord Genuity analysts have maintained their Buy rating for MedAdvisor and raised their price target to $0.45 from $0.39 on a stronger-than-anticipated trading update.

The broker noted the latest trading update revealed management's revenue expectations of $120m-$123m, beating the prior estimate of $114.5m.

EBITDA guidance has also improved to $6.8m-$7.6m from a previously expected $3.5m. The broker attributes the revenue beat to strong performance in the US and Australia, particularly from the THRiV omnichannel product.

FY25 revenue now expected to reach $143.9m with EBITDA forecasted at $8.2m.

This report was published on May 23, 2024.

Target price is $0.45 Current Price is $0.43 Difference: $0.015
If MDR meets the Canaccord Genuity target it will return approximately 3% (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 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.75.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.00 cents.

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

NAB    NATIONAL AUSTRALIA BANK LIMITED

Banks – Overnight Price: $34.28

Goldman Sachs rates ((NAB)) as Downgrade to Neutral from Buy (3) –

Goldman Sachs assesses the National Australia Bank 1H24 as positive with the bank displaying strong fundamentals and a significant pipeline of productivity benefits, adding: sustaining these benefits in the outer years may prove challenging.

The broker views the upside risks to earnings from a better performance on expense control and net interest margin management due to less competitive pressures in business lending compared to housing.

Financial forecasts are unchanged. Target price maintained at $34.04 and the rating downgraded to Neutral from Buy on valuation grounds.

This report was published on May 23, 2024.

Target price is $34.04 Current Price is $34.28 Difference: minus $0.24 (current price is over target).
If NAB meets the Goldman Sachs target it will return approximately minus 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $30.41, suggesting downside of -11.3%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 168.00 cents and EPS of 226.70 cents.
At the last closing share price the estimated dividend yield is 4.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 15.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 222.5, implying annual growth of -5.9%.
Current consensus DPS estimate is 168.5, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 15.4.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 168.00 cents and EPS of 228.90 cents.
At the last closing share price the estimated dividend yield is 4.90%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.98.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 225.0, implying annual growth of 1.1%.
Current consensus DPS estimate is 169.7, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 15.2.

Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

NXD    NEXTED GROUP LIMITED

Education & Tuition – Overnight Price: $0.22

Canaccord Genuity rates ((NXD)) as Buy (1) –

Canaccord Genuity notes restrictive visa settings have impacted student enrolments, leading to an -8% decline in international student numbers for the March quarter.

The broker also acknowledges NextEd Group management's efforts to mitigate impacts through targeted course offerings and diversified campuses.

FY24 revenue is now expected to be $110.5m, down from $112.7m, and the forecast FY25 EBITDA has lowered to $13.1m from $18.4m. The broker remains optimistic about the long-term growth potential in vocational education offerings.

Canaccord Genuity maintains a Buy rating while lowering its price target to $0.60 from $0.70.

This report was published on May 23, 2024.

Target price is $0.60 Current Price is $0.22 Difference: $0.38
If NXD meets the Canaccord Genuity target it will return approximately 173% (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 minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.00.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 2.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 11.00.

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

RRL    REGIS RESOURCES LIMITED

Gold & Silver – Overnight Price: $1.92

Canaccord Genuity rates ((RRL)) as Buy (1) –

Canaccord Genuity analysts have lowerer their price target for Regis Resources to $2.50 from $2.55, while leaving their Buy rating in place.

Despite strong EBITDA growth forecasted for FY25, the broker highlighted increased all-in sustaining costs (AISC) and lower gold production estimates.

The new developments at the Duketon project, including the Garden Well Main and Rosemont Stage 3 underground mines, are expected to start contributing significantly from FY27.

Canaccord Genuity remains optimistic about the gold miner's long-term growth potential. Forecast FY25 EBITDA is lowered to $538.7m from $690.6m and the net profit estimate to $174.3m from $284.6m.

This report was published on May 23, 2024.

Target price is $2.50 Current Price is $1.92 Difference: $0.58
If RRL meets the Canaccord Genuity target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $2.23, suggesting upside of 16.0%(ex-dividends)
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 minus 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 192.00.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.8, implying annual growth of N/A.
Current consensus DPS estimate is 0.2, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 24.6.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 1.00 cents and EPS of 23.00 cents.
At the last closing share price the estimated dividend yield is 0.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.35.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.7, implying annual growth of 229.5%.
Current consensus DPS estimate is 0.8, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 7.5.

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

S32    SOUTH32 LIMITED

Mining – Overnight Price: $3.91

Goldman Sachs rates ((S32)) as Buy (1) –

Goldman Sachs assessed the strategy and guidance update from South32, pointing to an increase in capital expenditure for Worsley alumina to -US$650m, compared to the analyst's forecast of -US$370m for FY25-28, driven by mine development and sustaining capital.

The sale of the Illawarra Metallurgical Coal business is on track for 1H FY25, expected to move the balance sheet into a net cash position.

Positive drivers, according to Goldman Sachs, include higher metal prices and cost reductions in raw materials, projected to generate US$400m in free cash flow in the June quarter.

The broker lifts EPS estimates by 8% in FY24 and 3% in FY25. The target is raised to $4 from $3.70. Buy rating retained.

This report was published on May 22, 2024.

Target price is $4.00 Current Price is $3.91 Difference: $0.09
If S32 meets the Goldman Sachs target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $3.79, suggesting downside of -3.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 5.48 cents and EPS of 16.76 cents.
At the last closing share price the estimated dividend yield is 1.40%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.1, implying annual growth of N/A.
Current consensus DPS estimate is 3.9, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 32.3.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 15.39 cents and EPS of 45.70 cents.
At the last closing share price the estimated dividend yield is 3.94%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.56.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.3, implying annual growth of 166.9%.
Current consensus DPS estimate is 10.9, implying a prospective dividend yield of 2.8%.
Current consensus EPS estimate suggests the PER is 12.1.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

VIT    VITURA HEALTH LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.08

Petra Capital rates ((VIT)) as Speculative Buy (1) –

Management at Vitura Health announced a strategic review targeted at enhancing long-term profit margins, Petra Capital highlights.

The announcement also flagged a downgrade in FY24 margin expectations, with the analyst expecting an improvement in EBITDA margins in FY25, from cost reductions, particularly in employee expenses.

The company aims to extend customer retention and acquisition through expanding doctor clinic networks and enhancing the Doctors on Demand and CanView platforms.

Petra Capital makes some minor changes to EPS forecasts pending the full announcement at FY24 result in August

Speculative Buy rating remains and the target is lowered to 12c from 14c.

This report was published on May 23, 2024.

Target price is $0.12 Current Price is $0.08 Difference: $0.04
If VIT meets the Petra Capital target it will return approximately 50% (excluding dividends, fees and charges).
The company's fiscal year ends in June.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 1.00 cents and EPS of 1.10 cents.
At the last closing share price the estimated dividend yield is 12.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.27.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 1.00 cents and EPS of 1.30 cents.
At the last closing share price the estimated dividend yield is 12.50%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.15.

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

VUL    VULCAN ENERGY RESOURCES LIMITED

New Battery Elements – Overnight Price: $4.78

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

Canaccord Genuity highlights significant progress at Vulcan Energy Resources' Zero Carbon Lithium project, including the operational LEOP plant and ongoing construction of the CLEOP facility, which is expected to start in September 2024.

The recent site visit impressed the analysts with advancements in direct lithium extraction (DLE) technology and broad support for project development.

The analysts continue to see strategic financing and project milestones as key re-rating catalysts for the shares.

Canaccord Genuity retains a Speculative Buy rating, with its price target unchanged at $11.50.

This report was published on May 23, 2024.

Target price is $11.50 Current Price is $4.78 Difference: $6.72
If VUL meets the Canaccord Genuity target it will return approximately 141% (excluding dividends, fees and charges).

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

WBC    WESTPAC BANKING CORPORATION

Banks – Overnight Price: $26.64

Goldman Sachs rates ((WBC)) as Downgrade to Sell from Neutral (5) –

Goldman Sachs assesses the 1H24 results for Westpac and highlights concerns over execution, cost, and timing risks associated with the bank's technology simplification plan.

The broker also raises doubts on the potential constraints on growth due to the bank's heavy exposure to the Australian housing market, and the impact of managing interest rate risks over shorter durations.

Despite a strong capital position and some positive earnings indicators, the analysts point to valuation concerns, with the bank's 12-month forward PER of 14.2x above its historic average.

Goldman Sachs' FY24 estimates remain broadly in line with consensus.

Rating downgraded to Sell from Neutral. Target retained at $24.10.

This report was published on May 23, 2024.

Target price is $24.10 Current Price is $26.64 Difference: minus $2.54 (current price is over target).
If WBC meets the Goldman Sachs target it will return approximately minus 10% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $25.23, suggesting downside of -5.3%(ex-dividends)
The company's fiscal year ends in September.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 165.00 cents and EPS of 188.00 cents.
At the last closing share price the estimated dividend yield is 6.19%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 189.2, implying annual growth of -7.8%.
Current consensus DPS estimate is 168.8, implying a prospective dividend yield of 6.3%.
Current consensus EPS estimate suggests the PER is 14.1.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 150.00 cents and EPS of 185.00 cents.
At the last closing share price the estimated dividend yield is 5.63%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 193.0, implying annual growth of 2.0%.
Current consensus DPS estimate is 155.5, implying a prospective dividend yield of 5.8%.
Current consensus EPS estimate suggests the PER is 13.8.

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

WC8    WILDCAT RESOURCES LIMITED

New Battery Elements – Overnight Price: $0.48

Canaccord Genuity rates ((WC8)) as Speculative Buy (1) –

Canaccord Genuity highlights the positive assay results from Wildcat Resources' Tabba Tabba Lithium Project, which indicate an extension of the Luke discovery to over 800m in strike length.

The analysts are optimistic about the shallow nature of the Luke pegmatite, which they believe bodes well for future open-pit mining. The company is expecting a maiden resource for Tabba Tabba in 2H 2024.

Canaccord Genuity sticks with its Speculative Buy rating, price target unchanged at $1.00.

This report was published on May 23, 2024.

Target price is $1.00 Current Price is $0.48 Difference: $0.52
If WC8 meets the Canaccord Genuity target it will return approximately 108% (excluding dividends, fees and charges).

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

WEB    WEBJET LIMITED

Travel, Leisure & Tourism – Overnight Price: $8.65

Goldman Sachs rates ((WEB)) as No Rating (-1) –

Webjet's FY24 revenue and EBITDA and came in 1% better and -1% below the Goldman Sachs forecasts, respectively.

Underlying net profit at $128.4m was -1% below the broker's estimates and in line with market consensus, the broker comments.

The broker lifts FY25/26 revenue estimates by 2-3% due to strong performance in WebBeds TTV, up 35% year-to-date, partly offset by lower Webjet OTA revenue.

Accordingly, net profit estimates are adjusted between -1% for FY26 and 2% for FY26.

No rating. No price target.

This report was published on May 22, 2024.

Current Price is $8.65. Target price not assessed.
Current consensus price target is $10.27, suggesting upside of 18.7%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 EPS of 39.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.18.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.3, implying annual growth of 118.8%.
Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 EPS of 47.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.40.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.1, implying annual growth of 18.9%.
Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 17.6.

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

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Jarden rates ((WEB)) as Buy (1) –

Jarden assesses the FY24 Webjet result as strong. Underlying EBITDA grew 40% year-on-year, in line with guidance and consensus forecasts.

The broker highlights the WebBeds business outperformed, with TTV up 35% year-to-date against FY25 guidance of 25% growth.

Management also announced plans to demerge its B2B (WebBeds) from B2C (OTA) businesses to drive valuation benefits and allow each business to focus on specific growth strategies.

The analyst adjusts net profit estimates for FY25 by -1% for the proposed demerger, and by -0.4% for FY26.

Buy rating remains with an upgraded target of $10.30, up from $9.55.

This report was published on May 22, 2024.

Target price is $10.30 Current Price is $8.65 Difference: $1.65
If WEB meets the Jarden target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $10.27, suggesting upside of 18.7%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY25:

Jarden forecasts a full year FY25 EPS of 37.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 23.01.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.3, implying annual growth of 118.8%.
Current consensus DPS estimate is 7.5, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 20.9.

Forecast for FY26:

Jarden forecasts a full year FY26 EPS of 47.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.13.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.1, implying annual growth of 18.9%.
Current consensus DPS estimate is 6.3, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 17.6.

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

XRO    XERO LIMITED

Accountancy – Overnight Price: $133.54

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

Goldman Sachs has identified strong revenue growth, cost controls and much-lower-than-expected capex as highlights from Xero's FY24 result.

More negatively, the opex/sales ratio is expected to increase to 73% in FY25 from 68% in 2H of FY24 due to accelerated product investment, explain the analysts.

Buy rating retained. The broker's target rises to $164 from $156 to to reflect a stronger revenue outlook (up by 4% across FY25-26) partly offset by higher costs.

This report was published on May 24, 2024.

Target price is $164.00 Current Price is $133.54 Difference: $30.46
If XRO meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $138.58, suggesting upside of 3.8%(ex-dividends)
The company's fiscal year ends in March.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 158.03 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 84.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 121.1, 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 110.3.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 0.00 cents and EPS of 206.08 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 64.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 127.5, implying annual growth of 5.3%.
Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 104.7.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

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