Weekly Reports | Aug 23 2024
This story features BWP TRUST, and other companies. For more info SHARE ANALYSIS: BWP
Broker Rating Changes (Post Thursday Last Week)
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BWP TRUST ((BWP)) Upgrade to Hold from Sell by Moelis.B/H/S: 0/0/0
BWP Trust delivered FY24 earnings and distribution in line with Moelis’ expectations. BWP has successfully integrated the Newmark Property REIT portfolio following the transaction completing late June.
While the transaction is marginally dilutive to earnings, strategically it increases portfolio quality given NPR’s assets are younger and in modern format, and it provides scale benefits to BWP, the broker notes.
It also has a positive impact on BWP’s weighted average lease expiry. BWP was more active in acquiring and divesting assets than has been the case in recent years, Moelis notes.
Given demand for Bunnings ((WES)) assets, the broker believes we’re nearing the end of the asset devaluation cycle. Upgrade to Hold from Sell, target rises to $3.74 from $3.61.
CHARTER HALL SOCIAL INFRASTRUCTURE REIT ((CQE)) Upgrade to Buy from Hold by Moelis and Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Charter Hall Social Infrastructure REIT reported results which met Moelis’ expectations. Average daily fees rose 9.5% year-on-year and gearing rose to 33.7% from 33.25%.
Management revised the hedging structure which results in higher interest rates in the short term, the analyst states.
Target price unchanged at $3.02. The REIT is upgraded to Buy from Hold.
Charter Hall Social Infrastructure REIT delivered FY24 results that were in line with expectations. The FY25 distribution guidance was -9% below Canaccord Genuity’s forecasts.
This stemmed from a hedging reset, which the broker believes will increase the level of growth over the medium to longer term as it essentially brings forward debt costs.
The valuation is also becoming more attractive on a yield spread basis and, with the ongoing recycling of portfolio assets, in turn could support a narrowing of the discount to NTA. The broker upgrades to Buy from Hold and reduces the target to $2.84 from $2.95.
HUB24 LIMITED ((HUB)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
Wilsons upgrades Hub24 to Overweight from Market Weight following a strong start to FY25. The broker considers the upgraded guidance, that signals more than $11bn in net flows per annum, highlights the opportunities ahead.
The broker also emphasises the balance sheet is in an “intriguing position”, which signals the company may be readying for further M&A.
With the ongoing momentum and positive earnings upgrades, Wilsons expects the shares will close the PE gap relative to Netwealth Group ((NWL)) over the next 12 months. Target is raised to $56.20 from $49.00.
See also HUB downgrade.
SIMS LIMITED ((SGM)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
In a better-than-expected price outcome, according to Jarden, Sims has sold its underperforming UK Metals business for around $385m. Also, management announced plans to sell its residual -12.4% stake in Circular Services for around US$30m.
At a time of US steel capacity increases, arguably these transactions improve the likelihood of a takeover/merger, suggests the broker, given the company’s lagging share price.
Jarden lowers its target for Sims to $11.90 from $12.10 but upgrades to Overweight from Neutral on greater valuation certainty.
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HUB24 LIMITED ((HUB)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden observes the Hub24 platform revenue came in lower than expected in FY24 with EBITDA meeting forecasts.
The broker believes the FY26 funds under administration guidance is conservative but some “moderation” is expected in margins.
EPS forecasts are revised by -1% for FY25 and -3.5% for FY26. Target price trimmed to $44.20 from $44.45.
Due to the valuation with much of the good news/earnings forecasts discounted in the stock price, Jarden downgrades Hub24 to Underweight from Neutral
See also HUB upgrade.
LATIN RESOURCES LIMITED ((LRS)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0
Pilbara Minerals ((PLS)) has entered a binding agreement to acquire Latin Resources, securing the flagship Salinas lithium project in Brazil, which represents an opportunity to diversify its upstream lithium business.
Canaccord Genuity envisages a low probability of a competing takeover bid.
Latin Resources shareholders will receive seven new Pilbara Minerals shares for each share held, implying an acquisition value of $563m. Rating is downgraded to Hold from Speculative Buy and the target reduced to $0.19 from $0.60.
TELSTRA GROUP LIMITED ((TLS)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Telstra Group’s FY24 result met consensus forecasts but Jarden considers it to be a lower-quality result, highlighting a reversal of a provision relating to the Digicel acquisition.
Management tightened FY25 guidance, confirming the broker’s view that previous FY25 guidance was conservative.
FY25 EPS forecasts rise 3% (to reflect lower depreciation and amortisation, net interest costs and a lower tax rate); and FY26 EPS forecasts fall -3%.
All up, key businesses revealed strong momentum, observes the broker.
Rating is downgraded to Overweight from Buy. Target price is steady at $4.20.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | BWP TRUST | Neutral | Sell | Moelis | |
| 2 | CHARTER HALL SOCIAL INFRASTRUCTURE REIT | Buy | Buy | Moelis | |
| 3 | CHARTER HALL SOCIAL INFRASTRUCTURE REIT | Buy | Neutral | Canaccord Genuity | |
| 4 | HUB24 LIMITED | Buy | Neutral | Wilsons | |
| 5 | SIMS LIMITED | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 6 | HUB24 LIMITED | Sell | Neutral | Jarden | |
| 7 | LATIN RESOURCES LIMITED | Neutral | Buy | Canaccord Genuity | |
| 8 | TELSTRA GROUP LIMITED | Buy | Buy | Jarden | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| AD8 | Audinate Group | $10.08 | Canaccord Genuity | 12.00 | 20.00 | -40.00% |
| ANZ | ANZ Bank | $29.95 | Jarden | 29.50 | 29.00 | 1.72% |
| AOV | Amotiv | $10.45 | Goldman Sachs | 13.00 | 14.70 | -11.56% |
| Wilsons | 12.69 | 13.06 | -2.83% | |||
| APZ | Aspen Group | $2.17 | Moelis | 2.53 | 2.48 | 2.02% |
| ARB | ARB Corp | $41.92 | Wilsons | 47.52 | 44.39 | 7.05% |
| ARF | Arena REIT | $3.99 | Moelis | 3.89 | 3.76 | 3.46% |
| BBN | Baby Bunting | $1.59 | Wilsons | 2.10 | 1.80 | 16.67% |
| BSL | BlueScope Steel | $20.42 | Jarden | 22.90 | 23.50 | -2.55% |
| BVS | Bravura Solutions | $1.38 | Wilsons | 1.47 | N/A | – |
| BWP | BWP Trust | $3.68 | Moelis | 3.74 | 3.61 | 3.60% |
| CBA | CommBank | $136.46 | Goldman Sachs | 94.80 | 91.75 | 3.32% |
| Jarden | 106.00 | 105.00 | 0.95% | |||
| CGF | Challenger | $7.35 | Goldman Sachs | 8.00 | 7.50 | 6.67% |
| Jarden | 7.80 | 7.50 | 4.00% | |||
| COH | Cochlear | $304.00 | Jarden | 266.22 | 237.17 | 12.25% |
| Wilsons | 345.00 | 365.00 | -5.48% | |||
| CPU | Computershare | $28.29 | Goldman Sachs | 31.00 | 28.00 | 10.71% |
| Jarden | 30.10 | 29.20 | 3.08% | |||
| CQE | Charter Hall Social Infrastructure REIT | $2.69 | Canaccord Genuity | 2.84 | 2.95 | -3.73% |
| Moelis | 3.02 | 3.29 | -8.21% | |||
| CSL | CSL | $308.10 | Jarden | 329.62 | 305.34 | 7.95% |
| DHG | Domain Holdings Australia | $2.86 | Jarden | 3.40 | 3.55 | -4.23% |
| DXI | Dexus Industria REIT | $2.82 | Moelis | 3.32 | 3.21 | 3.43% |
| EBR | EBR Systems | $1.10 | Wilsons | 1.50 | 1.32 | 13.64% |
| EGG | Enero Group | $1.18 | Canaccord Genuity | 2.00 | 3.25 | -38.46% |
| EVN | Evolution Mining | $4.36 | Goldman Sachs | 4.05 | 4.15 | -2.41% |
| Jarden | 3.13 | 3.19 | -1.88% | |||
| EVS | EnviroSuite | $0.04 | Moelis | 0.06 | 0.09 | -33.33% |
| Wilsons | 0.04 | 0.11 | -63.64% | |||
| GQG | GQG Partners | $2.71 | Goldman Sachs | 3.05 | 3.00 | 1.67% |
| HUB | Hub24 | $54.31 | Jarden | 44.20 | 44.45 | -0.56% |
| Moelis | 53.85 | 49.85 | 8.02% | |||
| Wilsons | 56.20 | 49.00 | 14.69% | |||
| IMM | Immutep | $0.37 | Canaccord Genuity | 0.95 | 1.00 | -5.00% |
| JHX | James Hardie Industries | $50.73 | Goldman Sachs | 55.85 | 61.65 | -9.41% |
| Jarden | 54.00 | 55.00 | -1.82% | |||
| LIC | Lifestyle Communities | $8.20 | Goldman Sachs | 11.30 | 12.00 | -5.83% |
| Moelis | 13.10 | 18.90 | -30.69% | |||
| LRS | Latin Resources | $0.21 | Canaccord Genuity | 0.19 | 0.60 | -68.33% |
| MAD | Mader Group | $5.30 | Moelis | 6.52 | 7.41 | -12.01% |
| MAH | Macmahon | $0.34 | Jarden | 0.32 | 0.28 | 14.29% |
| MFG | Magellan Financial | $9.48 | Goldman Sachs | 10.00 | 9.10 | 9.89% |
| Jarden | 9.70 | 9.50 | 2.11% | |||
| MND | Monadelphous Group | $13.11 | Jarden | 13.50 | 13.80 | -2.17% |
| NAB | National Australia Bank | $36.90 | Goldman Sachs | 34.24 | 34.04 | 0.59% |
| Jarden | 36.00 | 34.00 | 5.88% | |||
| NDO | Nido Education | $0.83 | Moelis | 1.26 | 1.33 | -5.26% |
| Wilsons | 1.13 | 1.27 | -11.02% | |||
| NUF | Nufarm | $4.00 | Wilsons | 3.97 | 4.86 | -18.31% |
| NWH | NRW Holdings | $3.57 | Canaccord Genuity | 3.82 | 3.47 | 10.09% |
| Jarden | 3.85 | 3.20 | 20.31% | |||
| Moelis | 3.91 | 3.56 | 9.83% | |||
| NWL | Netwealth Group | $23.25 | Jarden | 17.20 | 17.75 | -3.10% |
| ORA | Orora | $2.42 | Goldman Sachs | 2.75 | 2.70 | 1.85% |
| ORG | Origin Energy | $9.99 | Goldman Sachs | 10.75 | 6.50 | 65.38% |
| Jarden | 10.00 | 10.70 | -6.54% | |||
| PLS | Pilbara Minerals | $3.00 | Jarden | 3.70 | 3.80 | -2.63% |
| PME | Pro Medicus | $150.80 | Goldman Sachs | 149.00 | 148.00 | 0.68% |
| Moelis | 148.05 | 99.57 | 48.69% | |||
| Wilsons | 145.00 | 93.00 | 55.91% | |||
| PRN | Perenti | $0.98 | Moelis | 1.29 | 1.25 | 3.20% |
| PWH | PWR Holdings | $9.54 | Moelis | 10.97 | 12.61 | -13.01% |
| REH | Reece | $26.01 | Goldman Sachs | 23.70 | 23.35 | 1.50% |
| RWC | Reliance Worldwide | $5.20 | Jarden | 5.60 | 5.25 | 6.67% |
| SEK | Seek | $21.72 | Goldman Sachs | 19.50 | 20.60 | -5.34% |
| Jarden | 26.60 | 28.00 | -5.00% | |||
| SGM | Sims | $10.97 | Jarden | 11.90 | 12.10 | -1.65% |
| SUN | Suncorp Group | $17.32 | Jarden | 17.35 | 17.17 | 1.05% |
| SVW | Seven Group | $39.22 | Goldman Sachs | 43.90 | 41.80 | 5.02% |
| TLS | Telstra Group | $3.98 | Goldman Sachs | 4.35 | 4.30 | 1.16% |
| TPW | Temple & Webster | $11.31 | Canaccord Genuity | 13.00 | 8.00 | 62.50% |
| Jarden | 14.30 | 12.67 | 12.87% | |||
| Petra Capital | 13.10 | 12.20 | 7.38% | |||
| TRJ | Trajan Group | $1.23 | Canaccord Genuity | 1.20 | 1.40 | -14.29% |
| TWE | Treasury Wine Estates | $11.81 | Goldman Sachs | 15.20 | 14.70 | 3.40% |
| Jarden | 14.60 | 14.50 | 0.69% | |||
| VVA | Viva Leisure | $1.36 | Petra Capital | 2.44 | 2.60 | -6.15% |
| WBC | Westpac | $30.05 | Goldman Sachs | 25.84 | 24.10 | 7.22% |
| Jarden | 28.60 | 26.20 | 9.16% | |||
| WDS | Woodside Energy | $25.97 | Goldman Sachs | 33.50 | 33.00 | 1.52% |
| WGX | Westgold Resources | $3.07 | Petra Capital | 3.10 | 2.79 | 11.11% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
APZ ASPEN GROUP LIMITED
Real Estate Overnight Price: $2.15
Moelis rates ((APZ)) as Buy (1)
Aspen Group delivered FY24 operating earnings above guidance and FY25 guidance was similarly upgraded. Residential rental income was up 36% year on year.
This was a function, Moelis notes, of strong organic growth, the completion of refurb projects, most notably across the Perth apartment portfolio, and the acquisition of apartment buildings in Sydney and Melbourne.
The estimated market rent for Aspen’s assets at reporting date was 12% higher than the FY24 average. Aspen’s current share price remains attractive in Moelis’ view, amidst an under-supplied housing market.
Target rises to $2.53 from $2.48, Buy retained.
This report was published on August 19, 2024.
Target price is $2.53 Current Price is $2.15 Difference: $0.38
If APZ meets the Moelis target it will return approximately 18% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 9.50 cents and EPS of 15.20 cents.
At the last closing share price the estimated dividend yield is 4.42%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.14.
Forecast for FY26:
Moelis forecasts a full year FY26 dividend of 10.10 cents and EPS of 16.10 cents.
At the last closing share price the estimated dividend yield is 4.70%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 13.35.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
AD8 AUDINATE GROUP LIMITED
Hardware & Equipment Overnight Price: $10.46
Canaccord Genuity rates ((AD8)) as Buy (1)
Canaccord Genuity highlights Audinate Group pre-released most of its FY24 results which left no notable surprises at the FY24 earnings report.
Management reiterated a slightly weaker FY25 gross profit with earnings returning to a “more predictable order pattern in FY26” as inventories unwind and discounting of older stock flows through.
The broker believes much of the FY25 disruption is cyclical and not structural.
Buy rating with $12 target unchanged.
This report was published on August 19, 2024.
Target price is $12.00 Current Price is $10.46 Difference: $1.54
If AD8 meets the Canaccord Genuity target it will return approximately 15% (excluding dividends, fees and charges).
Current consensus price target is $11.53, suggesting upside of 10.2%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 261.50.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 1.2, implying annual growth of -90.4%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 871.7.
Forecast for FY26:
Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 9.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 116.22.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 7.8, implying annual growth of 550.0%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 134.1.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
PRN PERENTI LIMITED
Mining Sector Contracting Overnight Price: $1.00
Moelis rates ((PRN)) as Buy (1)
Free cash flow in FY25 stood out with Perenti reporting $185m, that Moelis notes was a function of improved conversion, cash generating drilling and working capital. A new target for free cash flow for FY25 implies topline growth and margin expansion.
The broker comments the company has demonstrated momentum in converting a growing pipeline with cash generation and progressive de-gearing underpinning a payout policy of 30-40% of net profit.
Estimates for FY25 are revised down by -7% and FY26 revised up by 2% to reflect guidance as well as rebase interest and tax. A Buy rating is maintained, the target lifted to $1.29 from $1.25.
This report was published on August 20, 2024.
Target price is $1.29 Current Price is $1.00 Difference: $0.29
If PRN meets the Moelis target it will return approximately 29% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 6.00 cents and EPS of 17.20 cents.
At the last closing share price the estimated dividend yield is 6.00%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.81.
Forecast for FY26:
Moelis forecasts a full year FY26 dividend of 6.00 cents and EPS of 19.20 cents.
At the last closing share price the estimated dividend yield is 6.00%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.21.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
TPW TEMPLE & WEBSTER GROUP LIMITED
Furniture & Renovation Overnight Price: $11.65
Canaccord Genuity rates ((TPW)) as Buy (1)
Canaccord Genuity raises its target for Temple & Webster to $13 from $12 after modest earnings upgrades following FY24 results.
Despite the current investment-for-growth period for the company, FY24 revenue, adjusted earnings and free cash flow (FCF) all slightly exceeded the broker’s forecasts. Material market share gains were also evident in a softer macroeconomic environment.
Enhancing the competitive moat, suggest the analysts, the company is moving towards exclusive products via private label and direct supplier relationships. Buy.
This report was published on August 15, 2024.
Target price is $13.00 Current Price is $11.65 Difference: $1.35
If TPW meets the Canaccord Genuity target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $12.09, suggesting upside of 3.8%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Canaccord Genuity forecasts a full year FY25 dividend of 3.00 cents and EPS of 7.00 cents.
At the last closing share price the estimated dividend yield is 0.26%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 166.43.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 6.8, implying annual growth of 353.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 171.3.
Forecast for FY26:
Canaccord Genuity forecasts a full year FY26 dividend of 3.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 0.26%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 77.67.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.0, implying annual growth of 164.7%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 64.7.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
VVA VIVA LEISURE LIMITED
Travel, Leisure & Tourism Overnight Price: $1.34
Petra Capital rates ((VVA)) as Buy (1)
Viva Leisure’s FY24 results met guidance, leading the broker to tinker with forecasts while maintaining a positive view on the company, highlighting an FY24 margin increase to 21.6% from 10.7% in FY23 (22.7% in the June quarter suggesting FY25 momentum).
The broker expects the company to post a strong 32% rise in FY25 earnings (EBITDA) thanks to Viva Pay’s contributions; recently settled purchases in WA; and more Plus Fitness and ClubLime openings and initiatives.
Buy recommendation retained. Target price falls to $2.44 from $2.60.
This report was published on August 15, 2024.
Target price is $2.44 Current Price is $1.34 Difference: $1.1
If VVA meets the Petra Capital target it will return approximately 82% (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 15.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.93.
Forecast for FY26:
Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 17.90 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.49.
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: BWP - BWP TRUST
For more info SHARE ANALYSIS: CQE - CHARTER HALL SOCIAL INFRASTRUCTURE REIT
For more info SHARE ANALYSIS: HUB - HUB24 LIMITED
For more info SHARE ANALYSIS: LRS - LATIN RESOURCES LIMITED
For more info SHARE ANALYSIS: NWL - NETWEALTH GROUP LIMITED
For more info SHARE ANALYSIS: PLS - PILBARA MINERALS LIMITED
For more info SHARE ANALYSIS: SGM - SIMS LIMITED
For more info SHARE ANALYSIS: TLS - TELSTRA GROUP LIMITED
For more info SHARE ANALYSIS: WES - WESFARMERS LIMITED