Weekly Reports | Jul 05 2024
This story features SPARK NEW ZEALAND LIMITED, and other companies. For more info SHARE ANALYSIS: SPK
Broker Rating Changes (Post Thursday Last Week)
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SPARK NEW ZEALAND LIMITED ((SPK)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden reduces its target for Spark New Zealand to NZ$4.67 from NZ$5.03 due to more conservative forecasts for FY25 and a small increase in the long-term maintenance capex assumption. The rating is upgraded to Overweight from Neutral on valuation.
Over the past decade, the broker notes investors were attracted to the company’s strong mobile business and steady management with a focus on capital allocation discipline to support steady dividends. It’s felt management need to reconfirm its commitment to these principles.
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CITY CHIC COLLECTIVE LIMITED ((CCX)) Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Petra Capital has downgraded City Chic Collective from Buy to Hold, with a revised price target of 17c down from 60c.
The company announced what the broker considered to be a depressed trading update for FY24, including the divestment of Avenue for US$12m and an equity capital raise of $23m at 15c.
Group sales are expected to fall -30% to around $187m in FY24, with both A&NZ and Americas regions weak.
Petra Capital downgrades EBITDA estimates by between -53%-74%, citing renewed weakness in City Chic sales despite new product arrivals for FY24 and FY25, respectively.
CETTIRE LIMITED ((CTT)) Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Petra Capital has downgraded Cettire to Hold from Buy, with a revised price target of $1.20, down from $5.10.
Management provided a very weak trading update with FY24 EBITDA of $32m-$35m, significantly below previous estimates of $45.1m, highlights the analyst.
The update points to a notable margin squeeze, softening demand, and increased promotional activity, Petra Capital observes.
Future risks include the extent to which suppliers fund promotions versus the company, and reduced visibility in forecasting margins.
The broker cuts EBITDA forecasts by -25% to -40%, reflecting lower revenue and increased margin sensitivity to the consumer cycle for FY24 to FY26, respectively.
Hold rating. $1.20 target.
INSURANCE AUSTRALIA GROUP LIMITED ((IAG)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Insurance Australia Group has announced two significant new reinsurance covers, in an attempt to deliver a higher return on equity (ROE) metric with greater downside protection, explains Jarden.
Underwriting profits from above-budget CAT costs and prior year reserve top-ups have eroded around -25% of underlying insurance trading ratio (ITR) profits over the past five years, points out the broker.
The broker’s rating is downgraded to Overweight from Buy on valuation, but the target rises to $7.35 from $6.80 after incorporating a lower weighted average cost of capital (WACC) and a higher PE relative multiple.
LEO LITHIUM LIMITED ((LLL)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity analysts have downgraded their rating for Leo Lithium to Hold from Speculative Buy, lowering the price target to $0.50 from $0.80.
The downgrade reflects increased sovereign challenges in Mali and adjustments to financial projections following the sale of Goulamina to Ganfeng for US$343m.
The sale, approved by the Mali government, results in Leo Lithium ceasing project involvement by November 2024. Financial forecasts have been updated, with FY24 EBITDA now expected to be -$7.4m, reflecting better cost management, but FY25 EBITDA revised to $10m.
The broker views the transaction and subsequent capital return as steps to mitigate political risks and improve shareholder returns.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | SPARK NEW ZEALAND LIMITED | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 2 | CETTIRE LIMITED | Neutral | Buy | Petra Capital | |
| 3 | CITY CHIC COLLECTIVE LIMITED | Neutral | Buy | Petra Capital | |
| 4 | INSURANCE AUSTRALIA GROUP LIMITED | Buy | Buy | Jarden | |
| 5 | LEO LITHIUM LIMITED | Neutral | Buy | Canaccord Genuity | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| ASG | Autosports Group | $2.08 | Jarden | 3.20 | 3.25 | -1.54% |
| BKT | Black Rock Mining | $0.06 | Petra Capital | 0.17 | 0.15 | 13.33% |
| CCX | City Chic Collective | $0.11 | Petra Capital | 0.17 | 0.60 | -71.67% |
| CKF | Collins Foods | $9.05 | Canaccord Genuity | 9.20 | 9.25 | -0.54% |
| Jarden | 10.01 | 10.25 | -2.34% | |||
| Wilsons | 12.83 | 12.72 | 0.86% | |||
| CTT | Cettire | $1.30 | Petra Capital | 1.20 | 5.10 | -76.47% |
| EVN | Evolution Mining | $3.60 | Goldman Sachs | 3.21 | 4.25 | -24.47% |
| Jarden | 2.84 | 2.91 | -2.41% | |||
| GDG | Generation Development | $2.45 | Moelis | 2.94 | 2.56 | 14.84% |
| HLS | Healius | $1.42 | Jarden | 1.22 | 1.26 | -3.17% |
| IAG | Insurance Australia Group | $7.04 | Goldman Sachs | 6.72 | 6.30 | 6.67% |
| Jarden | 7.35 | 6.80 | 8.09% | |||
| IGO | IGO | $5.89 | Jarden | 8.53 | 9.65 | -11.61% |
| IMM | Immutep | $0.28 | Wilsons | 1.13 | 0.90 | 25.56% |
| KAR | Karoon Energy | $1.88 | Jarden | 2.28 | 2.21 | 3.17% |
| LLL | Leo Lithium | Canaccord Genuity | 0.50 | 0.80 | -37.50% | |
| MAY | Melbana Energy | $0.03 | Petra Capital | 0.08 | 0.19 | -57.89% |
| NXD | NextEd Group | $0.17 | Petra Capital | 0.31 | 0.55 | -43.64% |
| PDN | Paladin Energy | $13.17 | Canaccord Genuity | 15.90 | 16.00 | -0.62% |
| PXA | Pexa Group | $13.42 | Jarden | 13.65 | 12.60 | 8.33% |
| SGLLV | Ricegrowers | $7.39 | Canaccord Genuity | 10.00 | 9.60 | 4.17% |
| SHA | Shape Australia | $2.35 | Moelis | 2.64 | 2.12 | 24.53% |
| SLH | Silk Logistics | $1.25 | Moelis | 1.88 | 2.75 | -31.64% |
| SXE | Southern Cross Electrical Engineering | $1.69 | Moelis | 1.94 | 0.99 | 95.96% |
| TNE | TechnologyOne | $18.36 | Goldman Sachs | 19.70 | 18.85 | 4.51% |
| WTC | WiseTech Global | $96.53 | Goldman Sachs | 91.00 | 85.00 | 7.06% |
| XRO | Xero | $134.73 | Goldman Sachs | 180.00 | 164.00 | 9.76% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
BGL BELLEVUE GOLD LIMITED
Gold & Silver Overnight Price: $1.78
Goldman Sachs rates ((BGL)) as Initiation of coverage with Buy (1)
Goldman Sachs initiates coverage of Bellevue Gold with a Buy rating and $2.20 target price.
The broker highlights the company’s successful ramp-up to full production, targeting 200kozpa gold production by FY25 at an all-in-sustaining cost of $1,450/oz.
Additionally, studies are in progress for a mill expansion to 1.5Mtpa by FY27, potentially increasing gold production to around 250koz.
Compared to its peers in the mid-tier gold sector, the analyst believes the company is undervalued.
Buy. $2.20 target.
This report was published on June 26, 2024.
Target price is $2.20 Current Price is $1.78 Difference: $0.415
If BGL meets the Goldman Sachs target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $2.08, suggesting upside of 16.4%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 0.00 cents and EPS of 7.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 25.50.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 6.8, 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 26.3.
Forecast for FY25:
Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 19.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 9.39.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.6, implying annual growth of 173.5%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 5.0%.
Current consensus EPS estimate suggests the PER is 9.6.
Market Sentiment: 0.8
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
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
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
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
VNT VENTIA SERVICES GROUP LIMITED
Industrial Sector Contractors & Engineers Overnight Price: $3.95
Canaccord Genuity rates ((VNT)) as Initiation of coverage with Buy (1)
Canaccord Genuity has initiated coverage on Ventia Services with a Buy rating and a price target of $4.40.
The company provides essential infrastructure services across Defence & Social Infrastructure, Infrastructure Services, Telecommunications, and Transport in A&NZ with the broker highlighting the outlook is supported by long-term contracts with government and blue-chip clients.
Canaccord Genuity believes Ventia Services is offering great exposure to structural tailwinds such as population growth and ageing infrastructure.
Buy rating. $4.40 target.
This report was published on July 1, 2024.
Target price is $4.40 Current Price is $3.95 Difference: $0.45
If VNT meets the Canaccord Genuity target it will return approximately 11% (excluding dividends, fees and charges).
Current consensus price target is $4.10, suggesting upside of 3.3%(ex-dividends)
The company’s fiscal year ends in December.
Forecast for FY24:
Canaccord Genuity forecasts a full year FY24 dividend of 20.00 cents and EPS of 26.00 cents.
At the last closing share price the estimated dividend yield is 5.06%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.19.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 24.5, implying annual growth of 10.4%.
Current consensus DPS estimate is 19.2, implying a prospective dividend yield of 4.8%.
Current consensus EPS estimate suggests the PER is 16.2.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 21.00 cents and EPS of 28.00 cents.
At the last closing share price the estimated dividend yield is 5.32%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.11.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 26.8, implying annual growth of 9.4%.
Current consensus DPS estimate is 20.6, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 14.8.
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: CCX - CITY CHIC COLLECTIVE LIMITED
For more info SHARE ANALYSIS: CTT - CETTIRE LIMITED
For more info SHARE ANALYSIS: IAG - INSURANCE AUSTRALIA GROUP LIMITED
For more info SHARE ANALYSIS: LLL - LEO LITHIUM LIMITED
For more info SHARE ANALYSIS: SPK - SPARK NEW ZEALAND LIMITED