Australian Broker Call *Extra* Edition – Jul 03, 2024

This story features ARISTOCRAT LEISURE LIMITED, and other companies. For more info SHARE ANALYSIS: ALL

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)

ALL   BXB   DLI   ERD   IGO   IMM   JHX   KAR   PDN   SGLLV   SLH   SXE  

ALL    ARISTOCRAT LEISURE LIMITED

Gaming – Overnight Price: $49.59

Jarden rates ((ALL)) as Buy (1) –

Aristocrat Leisure’s Investor Day appears to have disappointed Jarden, most notably in the lack of financial targets.

But the broker retains confidence in the company’s gaming and D&D commitment, which it expect will beat the industry’s double-digit growth rate.

Buy rating and $47.20 target price retained.

This report was published on June 26, 2024.

Target price is $47.20 Current Price is $49.59 Difference: minus $2.39 (current price is over target).
If ALL meets the Jarden target it will return approximately minus 5% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $53.05, suggesting upside of 7.0%(ex-dividends)
The company’s fiscal year ends in September.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 77.00 cents and EPS of 220.10 cents.
At the last closing share price the estimated dividend yield is 1.55%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 22.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 234.9, implying annual growth of 5.6%.
Current consensus DPS estimate is 74.1, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 21.1.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 87.00 cents and EPS of 249.40 cents.
At the last closing share price the estimated dividend yield is 1.75%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.88.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 256.5, implying annual growth of 9.2%.
Current consensus DPS estimate is 81.1, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 19.3.

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

BXB    BRAMBLES LIMITED

Transportation & Logistics – Overnight Price: $14.16

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

Jarden demurs from consensus suspecting price deflation in its Brambles US Pallets division may have stabilised for FY25 but agrees with management that growth will be slow.

The broker observes lumber deflation appears to have halted; transport costs are rising and US food and beverage retailer inventories are fairly steady.

Overweight rating and $15.70 target price are retained.

This report was published on June 26, 2024.

Target price is $15.70 Current Price is $14.16 Difference: $1.54
If BXB meets the Jarden target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $16.43, suggesting upside of 16.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 73.04 cents and EPS of 82.04 cents.
At the last closing share price the estimated dividend yield is 5.16%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 17.26.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 88.5, implying annual growth of N/A.
Current consensus DPS estimate is 48.9, implying a prospective dividend yield of 3.5%.
Current consensus EPS estimate suggests the PER is 16.0.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 81.12 cents and EPS of 90.58 cents.
At the last closing share price the estimated dividend yield is 5.73%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.63.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 99.5, implying annual growth of 12.4%.
Current consensus DPS estimate is 55.5, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 14.2.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

DLI    DELTA LITHIUM LIMITED

New Battery Elements – Overnight Price: $0.27

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

Delta Lithium has announced an 82% increase in contained ounces for its gold resource at the Mt Ida Project in the WA Goldfields.

The Baldock deposit, which sits adjacent to the existing lithium resource, now comprises 4.8Mt at 4.4g/t gold for 674koz.

There is very little preventing a fast-track of mining activities for gold, lithium or both, explains the broker, as approval has already been sought for open pit mining at Mt Ida as part of the lithium strategy.

The Speculative Buy rating and target price of 70 cents are retained.

This report was published on June 28, 2024.

Target price is $0.70 Current Price is $0.27 Difference: $0.435
If DLI meets the Canaccord Genuity target it will return approximately 164% (excluding dividends, fees and charges).
The company’s fiscal year ends in December.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 EPS of minus 9.65 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 2.75.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 EPS of minus 1.56 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 16.99.

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

ERD    EROAD LIMITED

Transportation & Logistics – Overnight Price: $1.04

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

Eroad has announced yet another contract win to a New Zealand customer and an existing 6k unit-contract has been renewed for three years with a two-year extension option.

Canaccord Genuity considers FY25 revenue guidance to be conservative, believing the above contract suggests its is already likely to pass the bottom end of guidance.

The broker expects a consensus re-rating if the company continues on its growth path while managing costs, and believes FY27 will prove to be a breakout year.

Buy rating and $1.60 target price retained.

This report was published on June 26, 2024.

Current Price is $1.04. Target price not assessed.
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 3.89 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 26.77.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 10.36 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 10.04.

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

IGO    IGO LIMITED

Nickel – Overnight Price: $5.63

Jarden rates ((IGO)) as Buy (1) –

Jarden asserts that IGO’s Greenbushes asset performance has fallen short of expectations and that even the best assets do not perform when lowering production due to low offtake nominations.

Rather, the broker says, such circumstances should be used as an opportunity to consolidate one’s position in the industry and cost curve.

IGO is not operating Greenbushes given its minority interest and this poses problems for the company, says Jarden, but observes management does have some available levers if it brings pressure to bear.

Buy rating retained. Target price falls to $8.53 from $9.82.

This report was published on June 26, 2024.

Target price is $8.53 Current Price is $5.63 Difference: $2.9
If IGO meets the Jarden target it will return approximately 52% (excluding dividends, fees and charges).
Current consensus price target is $6.87, suggesting upside of 22.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 4.00 cents and EPS of 47.80 cents.
At the last closing share price the estimated dividend yield is 0.71%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.78.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 66.8, implying annual growth of -7.9%.
Current consensus DPS estimate is 14.7, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 8.4.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 1.00 cents and EPS of 43.60 cents.
At the last closing share price the estimated dividend yield is 0.18%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.4, implying annual growth of -59.0%.
Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 20.5.

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

IMM    IMMUTEP LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.29

Wilsons rates ((IMM)) as Overweight (1) –

Immutep has enjoyed a “stellar” month on the clinical-data and big pharma checkpoint franchise front, observes Wilsons.

The broker says topline results from TACTI-003 are imminent – an important validation in a “head-to-head trial design against Merck’s blockbuster Keytruda”.

Wilsons concedes the capital raising was unexpected but believes it is justified in the grand scheme of things.

Overweight rating retained. Target price is $1.13.

This report was published on June 26, 2024.

Target price is $1.13 Current Price is $0.29 Difference: $0.84
If IMM meets the Wilsons target it will return approximately 290% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.60 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 8.06.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 4.50 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 6.44.

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

JHX    JAMES HARDIE INDUSTRIES PLC

Building Products & Services – Overnight Price: $46.96

Jarden rates ((JHX)) as Buy (1) –

Post a two-day James Hardie Industries “In the Field” event, the Jarden analyst has come away with a medium to longer term upbeat view on the company and its growth potential.

Despite some short-term market-related downside risks, the company aspires to triple North American EBITDA over the next decade, driven by primary demand growth, positive average selling price growth, and operating leverage, Jarden highlights.

Management also aims to increase its on-market buyback by US$50m to US$300m, with 75% already completed. 

Buy rating and $54 target are unchanged.

This report was published on June 26, 2024.

Target price is $54.00 Current Price is $46.96 Difference: $7.04
If JHX meets the Jarden target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $57.60, suggesting upside of 22.7%(ex-dividends)
The company’s fiscal year ends in March.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 248.25 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 238.2, 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 19.7.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 0.00 cents and EPS of 288.05 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 16.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 284.4, implying annual growth of 19.4%.
Current consensus DPS estimate is 36.4, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 16.5.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

KAR    KAROON ENERGY LIMITED

Crude Oil – Overnight Price: $1.81

Jarden rates ((KAR)) as Buy (1) –

Karoon Energy has preannounced June quarterly production and results from Who Dat East and published an operational update on Brazil and Gulf of Mexico.

Jarden perceived the announcement to be mixed, but says it clears the deck ahead of the publication of the company’s capital management policy, about which the broker is upbeat.

Jarden expects a 25% free-cash-flow payout through either buybacks or dividends (most likely buybacks in 2024, taking the FY24 dividend forecast to zero), while Jarden’s FY25 dividend forecast rises to 10.7c from 10.2c.

FY24 EPS forecast falls and FY25 EPS forecast rises.

Rating is upgraded to Buy from Overweight. Target price rises to $2.28 from $2.21.

This report was published on June 26, 2024.

Target price is $2.28 Current Price is $1.81 Difference: $0.47
If KAR meets the Jarden target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $2.61, suggesting upside of 44.2%(ex-dividends)
The company’s fiscal year ends in December.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of 23.10 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 47.6, implying annual growth of N/A.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 3.8.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 10.70 cents and EPS of 24.30 cents.
At the last closing share price the estimated dividend yield is 5.91%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 42.5, implying annual growth of -10.7%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 4.3.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

PDN    PALADIN ENERGY LIMITED

Uranium – Overnight Price: $12.39

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

Paladin Energy’s Langer Heinrich production guidance has outpaced its definite feasibility study, as consensus forecasts sugggested.

But it fell shy of Canaccord Genuity’s expectations and the broker lowers its FY25 production forecast accordingly.

The broker expects a recovery in pricing levels in the December half but observes industry uncertainty regarding Russia will remain.

EPS forecasts fall sharply for FY24 and FY25. Buy rating retained. Target price eases to $15.90 from $16.

This report was published on June 27, 2024.

Target price is $15.90 Current Price is $12.39 Difference: $3.51
If PDN meets the Canaccord Genuity target it will return approximately 28% (excluding dividends, fees and charges).
Current consensus price target is $16.29, suggesting upside of 31.5%(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 2.90 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 427.68.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.4, 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 N/A.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 66.03 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 60.4, implying annual growth of N/A.
Current consensus DPS estimate is 2.2, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 20.5.

This company reports in USD. 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

SGLLV    RICEGROWERS LIMITED

Food, Beverages & Tobacco – Overnight Price: $7.36

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

Despite a share price near five-year highs, Canaccord Genuity believes Ricegrowers (a.k.a. SunRice) is still undervalued following record FY24 results and a very strong final dividend of 40cps, along with a 5cps special dividend.

Strong cash flow generation resulted in core debt being fully paid during the period, highlights the broker.

In FY24, the analyst explains every business unit delivered revenue and earnings growth, with the year-on-year improvement in International Rice and CopRice the standout contributors.

Canaccord Genuity retains its Buy rating and the target rises to $10.00 from $9.60.

This report was published on June 28, 2024.

Target price is $10.00 Current Price is $7.36 Difference: $2.64
If SGLLV meets the Canaccord Genuity target it will return approximately 36% (excluding dividends, fees and charges).
The company’s fiscal year ends in April.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 55.00 cents and EPS of 104.00 cents.
At the last closing share price the estimated dividend yield is 7.47%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.08.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 57.00 cents and EPS of 105.00 cents.
At the last closing share price the estimated dividend yield is 7.74%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.01.

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

SLH    SILK LOGISTICS HOLDINGS LIMITED

Transportation & Logistics – Overnight Price: $1.26

Moelis rates ((SLH)) as Buy (1) –

After reviewing peer trading updates, Moelis expects tough operating conditions will continue for Silk Logistics.

Disrupted freight flows have hit peers’ efficiency and utilisation; wet weather has cut horticultural volumes in North Queensland; and peers have not witnessed a post-Easter volume rebound.

EPS forecasts are steady in FY24; and fall -13% in FY25; and -11% in FY26.

Buy rating retained, the broker observing the company is trading at a sharp discount to peers. Target price falls to $1.88 from $2.16.

This report was published on June 26, 2024.

Target price is $1.88 Current Price is $1.26 Difference: $0.615
If SLH meets the Moelis target it will return approximately 49% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 5.90 cents and EPS of 15.50 cents.
At the last closing share price the estimated dividend yield is 4.66%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.16.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 8.70 cents and EPS of 17.40 cents.
At the last closing share price the estimated dividend yield is 6.88%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.27.

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

SXE    SOUTHERN CROSS ELECTRICAL ENGINEERING LIMITED

Mining Sector Contracting – Overnight Price: $1.68

Moelis rates ((SXE)) as Buy (1) –

Moelis initiates coverage on electrical contractor Southern Cross Electrical Engineering, which operates across the infrastructure, commercial, and resources sectors. The company has a national footprint and specialist workforce.

The broker expects a period of high earnings growth given the company has tailwinds via exposure to data centres, decarbonisation and electrification, as well as infrastructure spend.

Management has evolved the recurring revenue base from a historical reliance on the resources industry to an even split across commercial, infrastructure, and resources, explains the analyst.

Buy rating. A $1.94 target is set.

This report was published on June 28, 2024.

Target price is $1.94 Current Price is $1.68 Difference: $0.26
If SXE meets the Moelis target it will return approximately 15% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 5.00 cents and EPS of 7.80 cents.
At the last closing share price the estimated dividend yield is 2.98%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 21.54.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 7.00 cents and EPS of 11.70 cents.
At the last closing share price the estimated dividend yield is 4.17%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.36.

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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