Daily Market Reports | Aug 27 2024
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.
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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)
A1M ALK APE (3) ASG (2) ATG AUB AUE BLX BOQ BRI BXB CAJ CKF COF DUG EBO EQT GEM GOZ HLS IAG IMD (2) INA IPH LAU LGL MP1 (2) MPL MVF NSR NST (2) OCL PNR PWR PXA QUB (2) RED RRL (2) SBM SCG SGM SKC SKT SLC SSM STN STO SUL (3) TLX TRS UNI (2) WGX WTC
A1M AIC MINES LIMITED
Gold & Silver - Overnight Price: $0.33
Moelis rates ((A1M)) as Buy (1) -
AIC Mines' FY24 financial result broadly met Moelis's forecasts, save for a lower net interest expense, which delivered a small beat on net profit after tax.
Moelis considers the company to be well-funded for its expansion after closing the year with cash of $74.3m and low debt ($5m equipment maintenance facility), and that copper output should materialise post June 2025.
Buy rating retained, the broker observing the company is trading at a heavy discount to net asset value. Target price eases to 64c from 65c.
This report was published on August 22, 2024.
Target price is $0.64 Current Price is $0.33 Difference: $0.31
If A1M meets the Moelis target it will return approximately 94% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 0.00 cents and EPS of 3.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 9.17.
Forecast for FY26:
Moelis forecasts a full year FY26 dividend of 0.00 cents and EPS of 5.30 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.23.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ALK ALKANE RESOURCES LIMITED
Gold & Silver - Overnight Price: $0.40
Petra Capital rates ((ALK)) as Buy (1) -
Petra Capital raises its gold price forecasts for the 2H of 2024, 2025 and 2026 by 7%. The 2027 and 2028 forecasts also rise by 10%, while the long-term forecast is increased by 8%.
The broker believes investors will seek gold exposure for both risk diversification and as a currency alternative to the US dollar.
The target for Alkane Resources rises by 16% to $1.13. Buy.
This report was published on August 22, 2024.
Target price is $1.13 Current Price is $0.40 Difference: $0.73
If ALK meets the Petra Capital target it will return approximately 182% (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 6.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.06.
Forecast for FY26:
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
APE EAGERS AUTOMOTIVE LIMITED
Automobiles & Components - Overnight Price: $10.07
Jarden rates ((APE)) as Overweight (2) -
While Eagers Automotive reported earnings 3% ahead of Jarden's estimate, a weaker 1H24 result relative to consensus was due principally to slightly weaker gross and profit margins, with management flagging further minor margin compression in the near term.
It nevertheless appears Eagers is near the end of profit margin headwinds, the broker suggests, before the margin remains flat and
then improves.
With the industry likely at a cyclical low and management guiding for a long-term profit margin target of above 4.5%, well ahead of Jarden's forecast 3% in outer years, the broker views the company as at a potential growth inflection point.
Target falls to $12.60 from $13.00, Overweight retained.
This report was published on August 23, 2024.
Target price is $12.60 Current Price is $10.07 Difference: $2.53
If APE meets the Jarden target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $11.89, suggesting upside of 18.0%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 61.00 cents and EPS of 94.30 cents.
At the last closing share price the estimated dividend yield is 6.06%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.68.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 92.7, implying annual growth of -16.3%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 10.9.
Forecast for FY25:
Jarden forecasts a full year FY25 dividend of 65.70 cents and EPS of 92.40 cents.
At the last closing share price the estimated dividend yield is 6.52%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.90.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 94.5, implying annual growth of 1.9%.
Current consensus DPS estimate is 66.4, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 10.7.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Moelis rates ((APE)) as Downgrade to Hold from Buy (3) -
Eagers Automotive's June-half result nosed out guidance but Moelis observes gross profit margins disappointed, falling to 17.8% from 18.8% at December 31due to pressure on new car margins and excess BYD stock (cleared through discounting).
A jump in interest costs and inventory also hit profit before tax margins. Moelis spies little relief for margins over the next few years but suspects the company does have levers it can pull on the revenue and productivity front that could mitigate some of the impact.
Net operating cash flow fell -35% to $228m and the company closed the year with a strong balance sheet and net debt of $494.1m, observed Moelis.
On the upside, management retained FY24 guidance, forecasting more than $1bn topline growth advising demand remained robust.
EPS forecasts are downgraded -5% to -10% over FY24 and FY25 to reflect the margin-compression outlook.
Rating downgraded to Hold from Buy. Target price falls to $11.51 (it was $12.41 in June).
This report was published on August 22, 2024.
Target price is $11.51 Current Price is $10.07 Difference: $1.44
If APE meets the Moelis target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $11.89, suggesting upside of 18.0%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY24:
Moelis forecasts a full year FY24 dividend of 59.60 cents and EPS of 89.10 cents.
At the last closing share price the estimated dividend yield is 5.92%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.30.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 92.7, implying annual growth of -16.3%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 10.9.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 59.30 cents and EPS of 85.80 cents.
At the last closing share price the estimated dividend yield is 5.89%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.74.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 94.5, implying annual growth of 1.9%.
Current consensus DPS estimate is 66.4, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 10.7.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Wilsons rates ((APE)) as Market Weight (3) -
Eagers Automotive's June-half result met recent guidance but fell a touch shy of Wilsons' forecasts due to a fall in margins and higher interest costs as industry competition intensified.
Management retains FY24 guidance, expecting revenue growth of more than $1bn derived from acquisitions and greenfield operations.
While the size of the margin decrease surprised Wilsons, the broker retains the faith, observing a more bumpy path toward margin normalisation.
EPS forecasts fall for FY24 and FY25. The broker cuts its dividend forecasts -3% in FY24; and -5% in FY25 to maintain a payout ratio of roughly 70%.
Market Weight rating retained. Target price rises to $10.87 from $10.47.
This report was published on August 23, 2024.
Target price is $10.87 Current Price is $10.07 Difference: $0.8
If APE meets the Wilsons target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $11.89, suggesting upside of 18.0%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY24:
Wilsons forecasts a full year FY24 dividend of 66.00 cents and EPS of 92.60 cents.
At the last closing share price the estimated dividend yield is 6.55%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.87.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 92.7, implying annual growth of -16.3%.
Current consensus DPS estimate is 65.8, implying a prospective dividend yield of 6.5%.
Current consensus EPS estimate suggests the PER is 10.9.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 68.90 cents and EPS of 96.60 cents.
At the last closing share price the estimated dividend yield is 6.84%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.42.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 94.5, implying annual growth of 1.9%.
Current consensus DPS estimate is 66.4, implying a prospective dividend yield of 6.6%.
Current consensus EPS estimate suggests the PER is 10.7.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ASG AUTOSPORTS GROUP LIMITED
Automobiles & Components - Overnight Price: $2.09
Moelis rates ((ASG)) as Downgrade to Hold from Buy (3) -
Autosports Group's FY24 result missed consensus' forecasts by -7% and Moelis' forecasts by -14% (on a pre-AASB16 basis) as revenue fell and gross profit margins slumped to 19.5% from 20.1% with margin weakness skewed to the second half, observes the broker.
No FY25 guidance was provided but management expects the new car market will be subject to strong competition for some time.
Moelis attributes the margin fall to discounting arising from excess new car inventory. Operating cash flow fell -28% on the previous corresponding year, to $119.5m.
The broker expects the Stillwell Motor Group acquisition will be single-digit EPS accretive, funded from cash, and observes the company's balance sheet should rule out further M&A for a year.
EPS forecasts fall -10% in FY25 and FY26 to reflect margin pressures.
Rating is downgraded to Hold from Buy. Target price falls to $2.30.
This report was published on August 22, 2024.
Target price is $2.30 Current Price is $2.09 Difference: $0.21
If ASG meets the Moelis target it will return approximately 10% (excluding dividends, fees and charges).
Current consensus price target is $2.63, suggesting upside of 26.0%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 15.70 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 7.51%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.21.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 28.2, implying annual growth of -6.9%.
Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 8.1%.
Current consensus EPS estimate suggests the PER is 7.4.
Forecast for FY26:
Moelis forecasts a full year FY26 dividend of 13.50 cents and EPS of 24.70 cents.
At the last closing share price the estimated dividend yield is 6.46%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.46.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 29.9, implying annual growth of 6.0%.
Current consensus DPS estimate is 19.0, implying a prospective dividend yield of 9.1%.
Current consensus EPS estimate suggests the PER is 7.0.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Wilsons rates ((ASG)) as Overweight (1) -
Autosports Group's FY24 result missed Wilsons' forecasts by a decent clip due to a sharp fall in gross margins as competitive pressures intensified.
No FY25 guidance was provided but management advised competition would continue to weigh on the company forcing it to introduce consumer incentives and marketing initiatives.
Used vehicle servicing, parts and collision repair revenue proved a bright spot, management expecting stable margins and costs on improved revenue.
The broker, while surprised, holds the faith, suspecting a more bumpy path to margin normalisation than expected.
Overweight rating retained. Target price falls to $3.41 from $3.69.
This report was published on August 23, 2024.
Target price is $3.41 Current Price is $2.09 Difference: $1.32
If ASG meets the Wilsons target it will return approximately 63% (excluding dividends, fees and charges).
Current consensus price target is $2.63, suggesting upside of 26.0%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY25:
Wilsons forecasts a full year FY25 dividend of 17.00 cents and EPS of 30.20 cents.
At the last closing share price the estimated dividend yield is 8.13%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.92.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 28.2, implying annual growth of -6.9%.
Current consensus DPS estimate is 17.0, implying a prospective dividend yield of 8.1%.
Current consensus EPS estimate suggests the PER is 7.4.
Forecast for FY26:
Wilsons forecasts a full year FY26 dividend of 19.00 cents and EPS of 34.30 cents.
At the last closing share price the estimated dividend yield is 9.09%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.09.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 29.9, implying annual growth of 6.0%.
Current consensus DPS estimate is 19.0, implying a prospective dividend yield of 9.1%.
Current consensus EPS estimate suggests the PER is 7.0.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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