Australian Broker Call *Extra* Edition – Sep 11, 2024

Daily Market Reports | Sep 11 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.

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)

AIZ   AND   APE   ASL   BKT   BRG   CAR   CMM   COE   CWY   DHG   HGO   HVN   IFT   JBH   LOT   NXG   NXL   QPM   REA   SEK   SMR   VIT  

REA    REA GROUP LIMITED

Real Estate - Overnight Price: $202.48

Jarden rates ((REA)) as Sell (5) -

Following the reporting season, Jarden highlights consensus EPS revisions across FY25-27 were downwards to varying degrees for the four main online classifieds companies. On the other hand, valuation multiples have risen for all except Domain Holdings Australia.

Rather than volumes, the broker suggests an ability to grow yield is the key driver of long-term value for online classifieds businesses, noting yield growth was strong across FY24 for all four, and well ahead of inflation.

The analysts expect yields will continue to grow well above the rate of inflation for REA Group, CAR Group, Seek and Domain, demonstrating the pricing power across these exposures.

Jarden raises its target for REA Group by 4% to $170 following the sale of PropertyGuru and a small increase to the broker's FY25 volume assumption.

This report was published on September 5, 2024.

Target price is $170.00 Current Price is $202.48 Difference: minus $32.48 (current price is over target).
If REA meets the Jarden target it will return approximately minus 16% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $218.46, suggesting upside of 10.2%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 2236.40 cents and EPS of 426.80 cents.
At the last closing share price the estimated dividend yield is 11.05%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 47.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 426.5, implying annual growth of 86.0%.
Current consensus DPS estimate is 237.0, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 46.5.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 258.50 cents and EPS of 486.80 cents.
At the last closing share price the estimated dividend yield is 1.28%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 41.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 504.0, implying annual growth of 18.2%.
Current consensus DPS estimate is 280.1, implying a prospective dividend yield of 1.4%.
Current consensus EPS estimate suggests the PER is 39.3.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

SEK    SEEK LIMITED

Jobs & Skilled Labour Services - Overnight Price: $23.02

Jarden rates ((SEK)) as Buy (1) -

Following the reporting season, Jarden highlights consensus EPS revisions across FY25-27 were downwards to varying degrees for the four main online classifieds companies. On the other hand, valuation multiples have risen for all except Domain Holdings Australia.

Rather than volumes, the broker suggests an ability to grow yield is the key driver of long-term value for online classifieds businesses, noting yield growth was strong across FY24 for all four, and well ahead of inflation.

The analysts expect yields will continue to grow well above the rate of inflation for REA Group, CAR Group, Seek and Domain, demonstrating the pricing power across these exposures.

Seek remains Jarden's top pick in the space as the market is currently ignoring management's FY28 revenue aspiration, in the broker's view. The Buy rating and $26.60 target are maintained.

This report was published on September 5, 2024.

Target price is $26.60 Current Price is $23.02 Difference: $3.58
If SEK meets the Jarden target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $26.58, suggesting upside of 16.4%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 28.50 cents and EPS of 43.90 cents.
At the last closing share price the estimated dividend yield is 1.24%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 52.44.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 44.9, implying annual growth of N/A.
Current consensus DPS estimate is 38.8, implying a prospective dividend yield of 1.7%.
Current consensus EPS estimate suggests the PER is 50.9.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 39.70 cents and EPS of 61.00 cents.
At the last closing share price the estimated dividend yield is 1.72%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 37.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 58.7, implying annual growth of 30.7%.
Current consensus DPS estimate is 48.7, implying a prospective dividend yield of 2.1%.
Current consensus EPS estimate suggests the PER is 38.9.

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

SMR    STANMORE RESOURCES LIMITED

Coal - Overnight Price: $2.65

Petra Capital rates ((SMR)) as Buy (1) -

Petra Capital believes the Stanmore Resources acquisition of the other 50% of the Isaac South deposit is another smart, low-cost M&A transaction for the company.

The mine life at Isaac Plains complex has the potential to be extended to 15 years from three to four years currently, at a run rate of 4mt per annum which the analyst estimates would add 7% to the net present value of the company.

The Buy rating is retained with $5.32 target price, down by -5% due to updated lower coal price forecasts.

This report was published on September 5, 2024.

Target price is $5.32 Current Price is $2.65 Difference: $2.67
If SMR meets the Petra Capital target it will return approximately 101% (excluding dividends, fees and charges).
The company's fiscal year ends in December.

Forecast for FY24:

Petra Capital forecasts a full year FY24 dividend of 14.14 cents and EPS of 41.20 cents.
At the last closing share price the estimated dividend yield is 5.34%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.43.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 10.80 cents and EPS of 37.90 cents.
At the last closing share price the estimated dividend yield is 4.08%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 6.99.

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

VIT    VITURA HEALTH LIMITED

Pharmaceuticals & Biotech/Lifesciences - Overnight Price: $0.08

Petra Capital rates ((VIT)) as Speculative Buy (1) -

Petra Capital responded to the Vitura Health trading update with a dose of scepticism, highlighting the analyst would like to see tangible evidence of a turnaround before changing earnings forecasts.

In the first two months of FY25, the business is trading ahead of budget with 10% revenue growth and an increase in the EBITDA margin.

The broker is seeking price stabilisation and more durable price improvements post what has been a very competitive medicinal cannabis distribution environment.

The Speculative Buy rating and 12c target are unchanged.

This report was published on September 5, 2024.

Target price is $0.12 Current Price is $0.08 Difference: $0.04
If VIT meets the Petra Capital target it will return approximately 50% (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 1.00 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 1.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 5.71.

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

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don't have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide experienced, intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface.

This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.