Weekly Reports | Jun 21 2024
This story features CHARTER HALL SOCIAL INFRASTRUCTURE REIT, and other companies. For more info SHARE ANALYSIS: CQE
Broker Rating Changes (Post Thursday Last Week)
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CHARTER HALL SOCIAL INFRASTRUCTURE REIT ((CQE)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Charter Hall Social Infrastructure REIT is decreased to $2.75 from $3.05 and the rating upgraded to Neutral from Underweight.
While this REIT offers one of the better revenue growth stories in the sector, the broker sees limited near-term earnings growth.
DEXUS ((DXS)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Dexus is decreased to $7.60 from $7.90 and the rating upgraded to Neutral from Underweight. While most bad news is already reflected in the share price, the broker sees no evidence of sustainable FFO growth.
GPT GROUP ((GPT)) Upgrade to Overweight from Underweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for GPT Group is increased to $4.85 from $4.70 and the rating upgraded to Overweight from Underweight with shares trading at a discount to the broker’s sum-of-the-parts valuation.
LIFESTYLE COMMUNITIES LIMITED ((LIC)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Lifestyle Communities is decreased to $15 from $17 and the rating upgraded to Buy from Overweight as recent share price weakness looks overdone, in the broker’s opinion.
MIRVAC GROUP ((MGR)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The broker’s target for Mirvac Group is decreased to $2.20 from $2.25 and the rating upgraded to Overweight from Neutral as the share price has significantly underperformed the sector over the past six months.
STOCKLAND ((SGP)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Stockland is increased to $5.45 from $5.05 and the rating upgraded to Buy from Overweight.
Jarden believes residential momentum will improve in anticipation of rate cuts, while the acquisition of Lendlease Group’s ((LLC) MPC business is expected to drive EPS growth.
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GOODMAN GROUP ((GMG)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The broker’s target for Goodman Group rises to $37.60 from $30.50 and the rating is downgraded to Neutral from Overweight after an 82% share price rise over the past year.
The elevated stock price could become a funding source for oversold REIT’s in the sector, cautions Jarden.
SCENTRE GROUP ((SCG)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The target for Scentre Group is increased to $3.65 from $3.60 and the rating downgraded to Overweight from Buy. Jarden continues to like the mall sector and believes this REIT is well positioned despite a strong share price performance over the last six months.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | CHARTER HALL SOCIAL INFRASTRUCTURE REIT | Neutral | Sell | Jarden | |
| 2 | DEXUS | Neutral | Sell | Jarden | |
| 3 | GPT GROUP | Buy | Sell | Jarden | |
| 4 | LIFESTYLE COMMUNITIES LIMITED | Buy | Buy | Jarden | |
| 5 | MIRVAC GROUP | Buy | Sell | Jarden | |
| 6 | STOCKLAND | Buy | Buy | Jarden | |
| Downgrade | |||||
| 7 | GOODMAN GROUP | Neutral | Buy | Jarden | |
| 8 | SCENTRE GROUP | Buy | Buy | Jarden | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| ADH | Adairs | $1.91 | Canaccord Genuity | 1.92 | 2.14 | -10.28% |
| AKG | Academies Australasia | $0.18 | Taylor Collison | N/A | 0.35 | -100.00% |
| ARF | Arena REIT | $3.93 | Jarden | 4.30 | 4.10 | 4.88% |
| ASX | ASX | $58.53 | Goldman Sachs | 55.45 | 60.00 | -7.58% |
| Jarden | 61.10 | 63.70 | -4.08% | |||
| BCI | BCI Minerals | $0.22 | Canaccord Genuity | 0.49 | 0.70 | -30.00% |
| BMN | Bannerman Energy | $3.79 | Canaccord Genuity | 4.65 | 4.62 | 0.65% |
| BPT | Beach Energy | $1.47 | Wilsons | 1.76 | 1.87 | -5.88% |
| BWP | BWP Trust | $3.64 | Jarden | 3.55 | 3.30 | 7.58% |
| CHC | Charter Hall | $12.37 | Jarden | 14.50 | 13.60 | 6.62% |
| CIA | Champion Iron | $6.45 | Jarden | 7.94 | 8.01 | -0.87% |
| CIP | Centuria Industrial REIT | $3.11 | Jarden | 3.65 | 3.60 | 1.39% |
| CKF | Collins Foods | $9.21 | Canaccord Genuity | 9.25 | 10.95 | -15.53% |
| CLW | Charter Hall Long WALE REIT | $3.48 | Jarden | 3.60 | 3.80 | -5.26% |
| COF | Centuria Office REIT | $1.20 | Jarden | 1.20 | 1.30 | -7.69% |
| COI | Comet Ridge | $0.20 | Petra Capital | 0.35 | 0.38 | -7.89% |
| CQE | Charter Hall Social Infrastructure REIT | $2.39 | Jarden | 2.75 | 3.05 | -9.84% |
| CQR | Charter Hall Retail REIT | $3.34 | Jarden | 3.90 | 4.00 | -2.50% |
| CRD | Conrad Asia Energy | $0.80 | Wilsons | 1.93 | 1.97 | -2.03% |
| CSL | CSL | $291.72 | Jarden | 305.34 | 296.02 | 3.15% |
| CVW | Clearview Wealth | $0.58 | Taylor Collison | 0.90 | 0.92 | -2.17% |
| DSK | Dusk Group | $0.64 | Canaccord Genuity | 0.70 | 0.90 | -22.22% |
| DXS | Dexus | $6.53 | Jarden | 7.60 | 7.90 | -3.80% |
| EVN | Evolution Mining | $3.65 | Jarden | 2.91 | 3.02 | -3.64% |
| GMG | Goodman Group | $35.55 | Jarden | 37.60 | 30.50 | 23.28% |
| GPT | GPT Group | $4.08 | Jarden | 4.85 | 4.70 | 3.19% |
| HMC | HMC Capital | $7.39 | Jarden | 7.90 | 7.00 | 12.86% |
| INA | Ingenia Communities | $4.84 | Jarden | 5.50 | 5.45 | 0.92% |
| KMD | KMD Brands | $0.36 | Canaccord Genuity | 0.42 | 0.54 | -22.22% |
| LIC | Lifestyle Communities | $12.18 | Jarden | 15.00 | 17.00 | -11.76% |
| LNW | Light & Wonder | $151.38 | Jarden | 166.00 | 164.00 | 1.22% |
| MGR | Mirvac Group | $1.96 | Jarden | 2.20 | 2.25 | -2.22% |
| NSR | National Storage REIT | $2.33 | Jarden | 2.75 | 2.70 | 1.85% |
| ORG | Origin Energy | $10.46 | Jarden | 10.40 | 10.61 | -1.98% |
| SCG | Scentre Group | $3.17 | Jarden | 3.65 | 3.50 | 4.29% |
| SEK | Seek | $22.55 | Jarden | 28.50 | 29.00 | -1.72% |
| SGP | Stockland | $4.37 | Jarden | 5.45 | 5.05 | 7.92% |
| SPZ | Smart Parking | $0.48 | Petra Capital | 0.83 | 0.64 | 29.69% |
| TAH | Tabcorp Holdings | $0.69 | Jarden | 0.80 | 0.95 | -15.79% |
| VCX | Vicinity Centres | $1.89 | Jarden | 2.35 | 2.40 | -2.08% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
BWP BWP TRUST
REITs Overnight Price: $3.63
Jarden rates ((BWP)) as Underweight (4)
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The Underweight rating for BWP Trust is retained and the target increased to $3.55 from $3.30. Jarden expects this REIT’s net tangible assets (NTA) metric will come under pressure when assets are properly marked-to-market.
This report was published on June 20, 2024.
Target price is $3.55 Current Price is $3.63 Difference: minus $0.08 (current price is over target).
If BWP meets the Jarden target it will return approximately minus 2% (excluding dividends, fees and charges negative figures indicate an expected loss).
Current consensus price target is $3.65, suggesting upside of 0.6%(ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is 18.1, implying annual growth of 217.0%.
Current consensus DPS estimate is 18.3, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 20.1.
Forecast for FY25:
Current consensus EPS estimate is 18.6, implying annual growth of 2.8%.
Current consensus DPS estimate is 18.6, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 19.5.
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
CHC CHARTER HALL GROUP
REITs Overnight Price: $12.39
Jarden rates ((CHC)) as Overweight (2)
Within Jarden’s coverage of the Australian REIT sector, weighted-average funds from operations (FFO) growth forecasts are starting to improve for FY25 and FY26 to 3.6% and 7.9%, respectively, from -2.2% in FY24.
The broker believes downside risk to asset values is well reflected in current valuations, and REITs are increasingly moving to offence from defence.
Excluding Goodman Group (which remains the best quality stock in the sector), the analysts see around 18% upside to 12-month target prices.
The broker’s target for Charter Hall is increased to $14.50 from $13.60 and the Overweight rating is retained. It’s felt this REIT will be one of the main beneficiaries of a stabilising interest rate environment and improving transaction volumes.
This report was published on June 20, 2024.
Target price is $14.50 Current Price is $12.39 Difference: $2.11
If CHC meets the Jarden target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $14.48, suggesting upside of 16.8%(ex-dividends)
Forecast for FY24:
Current consensus EPS estimate is 75.7, implying annual growth of 82.6%.
Current consensus DPS estimate is 45.1, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 16.4.
Forecast for FY25:
Current consensus EPS estimate is 81.0, implying annual growth of 7.0%.
Current consensus DPS estimate is 47.6, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 15.3.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
SEK SEEK LIMITED
Jobs & Skilled Labour Services Overnight Price: $22.42
Jarden rates ((SEK)) as Buy (1)
Jarden assesses the outlook for Seek and reconfirms the positive take on the company.
The broker adjusts FY25 EPS estimates by -7%, which is attributed to the sale of the Latin American business and lower FY25 volume forecasts, as well as a higher -25% discount on the Seek Growth Fund’s valuation from -20%.
Jarden notes the market is not factoring in the company’s FY28 revenue aspirations in A&NZ and Asia, and the readjustment of the company’s customer base to SMEs and Corporate and Government.
Jarden maintains its Buy rating and adjust the price target to $28.50 from $29.00.
This report was published on June 17, 2024.
Target price is $28.50 Current Price is $22.42 Difference: $6.08
If SEK meets the Jarden target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $27.10, suggesting upside of 20.9%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 35.60 cents and EPS of 55.70 cents.
At the last closing share price the estimated dividend yield is 1.59%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 40.25.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 48.2, implying annual growth of -83.3%.
Current consensus DPS estimate is 37.5, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 46.5.
Forecast for FY25:
Jarden forecasts a full year FY25 dividend of 47.20 cents and EPS of 72.70 cents.
At the last closing share price the estimated dividend yield is 2.11%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 30.84.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 68.6, implying annual growth of 42.3%.
Current consensus DPS estimate is 52.0, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 32.7.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
REH REECE LIMITED
Furniture & Renovation Overnight Price: $25.92
Goldman Sachs rates ((REH)) as Initiation of coverage with Sell (5)
Goldman Sachs initiates coverage of Reece with a Sell rating and a $23.35 target price.
The broker views the A&NZ business as mature with limited growth potential, generating 44% of group revenue and 59% of EBITDA.
The US market generates 56% of revenue and offers growth opportunities through store expansions and margin improvements, but these are expected to be long-dated. The analyst forecasts 7% EBITDA compound annual growth for this segment over three years.
Goldman Sachs assesses the stock is trading above its historical valuations and at an excessive premium.
Sell rating and $23.35 target.
This report was published on June 13, 2024.
Target price is $23.35 Current Price is $25.92 Difference: minus $2.57 (current price is over target).
If REH 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 $21.37, suggesting downside of -17.6%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 26.00 cents and EPS of 65.00 cents.
At the last closing share price the estimated dividend yield is 1.00%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 39.88.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 64.0, implying annual growth of 6.6%.
Current consensus DPS estimate is 25.1, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 40.5.
Forecast for FY25:
Goldman Sachs forecasts a full year FY25 dividend of 27.00 cents and EPS of 66.00 cents.
At the last closing share price the estimated dividend yield is 1.04%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 39.27.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 64.9, implying annual growth of 1.4%.
Current consensus DPS estimate is 26.4, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 39.9.
Market Sentiment: -0.8
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
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CHARTS
For more info SHARE ANALYSIS: CQE - CHARTER HALL SOCIAL INFRASTRUCTURE REIT
For more info SHARE ANALYSIS: DXS - DEXUS
For more info SHARE ANALYSIS: GMG - GOODMAN GROUP
For more info SHARE ANALYSIS: GPT - GPT GROUP
For more info SHARE ANALYSIS: LIC - LIFESTYLE COMMUNITIES LIMITED
For more info SHARE ANALYSIS: MGR - MIRVAC GROUP
For more info SHARE ANALYSIS: SCG - SCENTRE GROUP
For more info SHARE ANALYSIS: SGP - STOCKLAND