Weekly Reports | Aug 16 2024
This story features EVT LIMITED, and other companies. For more info SHARE ANALYSIS: EVT
Broker Rating Changes (Post Thursday Last Week)
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EVT LIMITED ((EVT)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Due to much better hotel market conditions and an improving outlook for cinemas, Jarden upgrades its rating for EVT Ltd to Buy from Overweight. The broker sees upside risk to FY24 results.
While Thredbo is having weak snowfall to start the year, the analysts suggest improving conditions may surprise investors who are currently concerned by the 1H FY25 outlook.
The target rises to $12.44 from $11.31.
GENESIS ENERGY LIMITED ((GNE)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Prior to Genesis Energy’s FY24 results due on August 22, Jarden anticipates a rebound in earnings following a problematic year and upgrades its rating to Buy from Overweight.
From among Jarden’s coverage of four listed Gentailers, Genesis is expected to benefit most from a falling yield environment.
The broker’s target rises to NZ$2.82 from NZ$2.78 on a higher near-term earnings outlook as the company maximises its coal
stockpile into the elevated wholesale price period.
The broker forecasts FY24 earnings (EBITDA) of NZ$406m, below managemet’s guidance for between NZ$410-415m.
TRANSURBAN GROUP LIMITED ((TCL)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Transurban Group’s FY24 result broadly met consensus forecasts and appears to have pleased Jarden. FY25 dividend guidance was in line, implying a 5.1% yield.
The broker appreciates the company’s cost control but expects uncertainty surrounding the NSW Toll Review and the company’s M&A plans will continue to weight.
Rating upgraded to Neutral from Underweight, the broker suspecting recent share price weakness should set a floor for the company, given the dividend yield.
Target price falls to $12.40 from $12.70 to reflect earnings (EBITDA) downgrades of roughly -1% between FY25-FY27. FY25 EPS forecasts fall sharply.
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AROA BIOSURGERY LIMITED ((ARX)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Aroa Biosurgery’s June-quarter result largely met consensus forecasts and management reiterated FY25 revenue guidance (based on an NZD/USD exchanged rate of 64c).
The broker suspects FX movements could shift the dial in Aroa Biosurgery’s favour (spot is 60c).
Jarden observes the company’s inventory issues appear to have been cleared and expects positive operating cash flow in the December half.
EPS forecasts fall sharply, reflecting a change of lead analyst.
Rating is downgraded to Neutral from Overweight. Target price slumps -29% to 71c from $1, to reflect the analyst’s expectation of a longer road to improved valuation.
AURIZON HOLDINGS LIMITED ((AZJ)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Aurizon Holdings reported FY24 core earnings -11% below Jarden’s estimate. The large earnings miss was driven by higher-than-forecast net interest expenses, which the company expects to remain at this level in FY25.
With rising capital intensity, the broker sees a path to lower near-term earnings growth, which it believes will likely weigh on Aurizon’s share price.
With the expectation of significant downgrades to the consensus earnings outlook and the considerable difference between Jarden’s earnings forecasts and consensus, the broker downgrades to Underweight from Neutral. Target falls to $3.25 from $3.75.
DATA#3 LIMITED. ((DTL)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden downgrades its rating for Data#3 to Neutral from Overweight on account of FY25 downside risk associated with losing a key Federal Government Microsoft contract and a lower government consultant spend in Queensland.
The broker also highlights the upcoming Queensland election, noting Data#3 has historically experienced deferral of IT spending during such periods.
The $8.65 target is unchanged.
NETWEALTH GROUP LIMITED ((NWL)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
Netwealth Group’s FY24 result was softer than Wilsons’ lofty expectations, although the broker was towards the top end of consensus and needing to revise funds under administration estimates downward following recent markets ructions.
Increased reinvestment assumptions and a reduced revenue forecast drive low-teens earnings downgrades across Wilsons’ medium term forecasts.
The broker continues to remain attracted to the Netwealth story both in the short and medium-term, observing adviser movements to key customers and peer-forced Platform migration efforts as offering supplemental tailwinds to already impressive growth.
But for now, downgrade to Market Weight from Overweight. Target falls to $21.04 from $23.52.
REA GROUP LIMITED ((REA)) Downgrade to Sell from Underweight by Jarden.B/H/S: 0/0/0
REA Group’s FY24 result met forecasts but Jarden suspects a consensus downgrade may be in the wings and cuts its rating to Sell from Underweight. Target price eases to $161.00 from $164.00.
The broker’s concern relates to market listing volumes, which are becoming more difficult to predict and could be a swing factor for FY25, says Jarden.
Management guided to a flat outcome, which the broker doubts will be good enough for consensus given it translates to larger associated losses and higher D&A.
In the end, it comes down to valuation, says the broker, and the share price appears toppy. It would take a structural lift to housing turnover or higher new product penetration or inroads in India to shift the dial, says Jarden.
SPARK NEW ZEALAND LIMITED ((SPK)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden downgrades Spark New Zealand to Neutral from Outperform on valuation.
The previous upgrade was based on valuation, observes the broker, after a recent strong sell-off. That value gap has now been largely eliminated.
The broker still appreciates the company’s core mobile business and expects it will be fairly resilient, although the company’s cyclical earnings exposure means it is unlikely to emerge unscathed from the macro environment, says Jarden.
FY24 and FY25 EPS forecasts are unchanged. Target price is steady at NZ$4.67.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | EVT LIMITED | Buy | Buy | Jarden | |
| 2 | GENESIS ENERGY LIMITED | Buy | Buy | Jarden | |
| 3 | TRANSURBAN GROUP LIMITED | Neutral | Sell | Jarden | |
| Downgrade | |||||
| 4 | AROA BIOSURGERY LIMITED | Neutral | Buy | Jarden | |
| 5 | AURIZON HOLDINGS LIMITED | Sell | Neutral | Jarden | |
| 6 | DATA#3 LIMITED. | Neutral | Buy | Jarden | |
| 7 | NETWEALTH GROUP LIMITED | Neutral | Buy | Wilsons | |
| 8 | REA GROUP LIMITED | Sell | Sell | Jarden | |
| 9 | SPARK NEW ZEALAND LIMITED | Neutral | Buy | Jarden | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| 360 | Life360 | $17.94 | Goldman Sachs | 19.75 | 16.05 | 23.05% |
| AMP | AMP | $1.31 | Jarden | 1.30 | 1.20 | 8.33% |
| ANZ | ANZ Bank | $29.19 | Goldman Sachs | 29.42 | 29.10 | 1.10% |
| AOV | Amotiv | $10.65 | Canaccord Genuity | 14.40 | 14.60 | -1.37% |
| APA | APA Group | $7.90 | Jarden | 8.70 | 9.00 | -3.33% |
| ARX | Aroa Biosurgery | $0.54 | Jarden | 0.71 | 1.00 | -29.00% |
| AUB | AUB Group | $33.73 | Goldman Sachs | 33.00 | 32.50 | 1.54% |
| AVH | Avita Medical | $2.68 | Wilsons | 2.75 | 3.03 | -9.24% |
| AZJ | Aurizon Holdings | $3.43 | Jarden | 3.25 | 3.75 | -13.33% |
| BMN | Bannerman Energy | $2.39 | Petra Capital | 4.51 | 5.23 | -13.77% |
| BPT | Beach Energy | $1.30 | Goldman Sachs | 1.44 | 1.67 | -13.77% |
| Wilsons | 1.66 | 1.74 | -4.60% | |||
| CAR | CAR Group | $36.36 | Goldman Sachs | 40.90 | 41.40 | -1.21% |
| COE | Cooper Energy | $0.21 | Jarden | 0.26 | 0.24 | 8.33% |
| CSL | CSL | $301.12 | Wilsons | 291.78 | 297.02 | -1.76% |
| EMR | Emerald Resources | $3.77 | Canaccord Genuity | 4.50 | 4.80 | -6.25% |
| EVT | EVT Ltd | $11.46 | Jarden | 12.44 | 11.31 | 9.99% |
| HLI | Helia Group | $3.88 | Goldman Sachs | 4.55 | 4.53 | 0.44% |
| JAN | Janison Education | $0.22 | Wilsons | 0.25 | 0.36 | -30.56% |
| JHX | James Hardie Industries | $48.96 | Jarden | 55.00 | 54.00 | 1.85% |
| LNW | Light & Wonder | $155.05 | Canaccord Genuity | 180.00 | 175.00 | 2.86% |
| Jarden | 176.00 | 167.00 | 5.39% | |||
| LOT | Lotus Resources | $0.25 | Petra Capital | 0.41 | 0.59 | -30.51% |
| LYC | Lynas Rare Earths | $6.17 | Canaccord Genuity | 6.25 | 7.00 | -10.71% |
| NCK | Nick Scali | $14.51 | Jarden | 16.52 | 15.40 | 7.27% |
| Wilsons | 17.40 | 18.30 | -4.92% | |||
| NEU | Neuren Pharmaceuticals | $15.61 | Canaccord Genuity | 29.00 | 31.00 | -6.45% |
| NST | Northern Star Resources | $14.14 | Jarden | 12.30 | 13.20 | -6.82% |
| NWL | Netwealth Group | $21.84 | Wilsons | 21.04 | 23.52 | -10.54% |
| NWS | News Corp | $42.86 | Goldman Sachs | 48.90 | 48.70 | 0.41% |
| QBE | QBE Insurance | $16.15 | Jarden | 19.55 | 21.20 | -7.78% |
| REA | REA Group | $208.36 | Goldman Sachs | 221.00 | 223.00 | -0.90% |
| TCL | Transurban Group | $13.37 | Jarden | 12.40 | 12.70 | -2.36% |
| TWE | Treasury Wine Estates | $12.35 | Goldman Sachs | 14.70 | 15.20 | -3.29% |
| WDS | Woodside Energy | $25.52 | Jarden | 26.60 | 28.50 | -6.67% |
| Jarden | 26.60 | 29.15 | -8.75% | |||
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
AEE AURA ENERGY LIMITED
Energy Overnight Price: $0.13
Petra Capital rates ((AEE)) as Buy (1)
Petra Capital highlights ASX uranium equities are down year-to-date compared to the U308 contract price which has risen 18% on low volumes.
The broker believes uranium stocks have the potential to rally with any uranium spot price rises, which is believed to be most likely given term contracting volumes need to play catch up.
Petra Capital highlights the Tiris project for Aura Energy has received permits for development and mining with a final investment decision expected in the March quarter 2025.
The company updated the capex forecast to CA$2.2bn from CA$1.3bn. Buy rated with a 45c target price.
This report was published on August 8, 2024.
Target price is $0.45 Current Price is $0.13 Difference: $0.32
If AEE meets the Petra Capital target it will return approximately 246% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 2.60.
Forecast for FY26:
Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 2.60.
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
LNW LIGHT & WONDER INC
Gaming Overnight Price: $153.67
Canaccord Genuity rates ((LNW)) as Buy (1)
Canaccord Genuity points to a robust 2Q24 earnings report for Light & Wonder which is above expectations because of strong land-based gaming growth.
Cashflow was softer, the analyst notes, due to -$32m in legal contingencies and some working capital “headwinds” with higher capex.
The Buy rating is retained and the target price raised to $180 from $175.
This report was published on August 8, 2024.
Target price is $180.00 Current Price is $153.67 Difference: $26.33
If LNW meets the Canaccord Genuity target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $179.80, suggesting upside of 17.0%(ex-dividends)
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 339.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 45.33.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 403.3, implying annual growth of 49.4%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 38.1.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 492.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 31.23.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 556.8, implying annual growth of 38.1%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 27.6.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
NCK NICK SCALI LIMITED
Furniture & Renovation Overnight Price: $14.70
Wilsons rates ((NCK)) as Overweight (1)
Nick Scali reported FY24 earnings which met consensus forecasts, according to Wilsons.
The company has experienced site availability challenges since FY21, so 5-7 new group stores for FY25 in that context is viewed positively by the analyst.
Wilsons looks beyond the near term freight charge headwinds and the softer trading conditions in A&NZ in June/July to the longer term global opportunity for the company.
Net profit estimates are adjusted by -14% for FY25 and -4% for FY26, with a revision in the target price of -5% to $17.40. Overweight rating.
This report was published on August 12, 2024.
Target price is $17.40 Current Price is $14.70 Difference: $2.7
If NCK meets the Wilsons target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $16.26, suggesting upside of 10.6%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 53.00 cents and EPS of 75.70 cents.
At the last closing share price the estimated dividend yield is 3.61%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.42.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 89.4, implying annual growth of -9.5%.
Current consensus DPS estimate is 60.5, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 16.4.
Forecast for FY26:
Wilsons forecasts a full year FY26 dividend of 69.70 cents and EPS of 99.60 cents.
At the last closing share price the estimated dividend yield is 4.74%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.76.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 92.9, implying annual growth of 3.9%.
Current consensus DPS estimate is 62.6, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 15.8.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
NEU NEUREN PHARMACEUTICALS LIMITED
Pharmaceuticals & Biotech/Lifesciences Overnight Price: $15.60
Canaccord Genuity rates ((NEU)) as Buy (1)
Canaccord Genuity revises earnings forecasts for Neuren Pharmaceuticals due to the 2Q2024 results from Daybue, the distribution company, which were lower than expectations and 2024 sales guidance was cut by -10%.
The broker believes the disappointment is only short term, with the longer term prospects for Daybue intact.
The target price is revised to $29 from $31. Buy rated.
This report was published on August 12, 2024.
Target price is $29.00 Current Price is $15.60 Difference: $13.4
If NEU meets the Canaccord Genuity target it will return approximately 86% (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 58.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 26.90.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 88.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 17.73.
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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CHARTS
For more info SHARE ANALYSIS: ARX - AROA BIOSURGERY LIMITED
For more info SHARE ANALYSIS: AZJ - AURIZON HOLDINGS LIMITED
For more info SHARE ANALYSIS: DTL - DATA#3 LIMITED.
For more info SHARE ANALYSIS: EVT - EVT LIMITED
For more info SHARE ANALYSIS: GNE - GENESIS ENERGY LIMITED
For more info SHARE ANALYSIS: NWL - NETWEALTH GROUP LIMITED
For more info SHARE ANALYSIS: REA - REA GROUP LIMITED
For more info SHARE ANALYSIS: SPK - SPARK NEW ZEALAND LIMITED
For more info SHARE ANALYSIS: TCL - TRANSURBAN GROUP LIMITED