Weekly Reports | Sep 13 2024
This story features DOMAIN HOLDINGS AUSTRALIA LIMITED, and other companies. For more info SHARE ANALYSIS: DHG
Broker Rating Changes (Post Thursday Last Week)
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DOMAIN HOLDINGS AUSTRALIA LIMITED ((DHG)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
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 lowers its target for Domain Holdings Australia to $3.35 from $3.40, but upgrades to Buy from Overweight following recent share price underperformance.
GOODMAN GROUP ((GMG)) Upgrade to Buy from Neutral by Jarden.B/H/S: 0/0/0
Jarden raises its target for Goodman Group to $40 from $37.60 and upgrades to Buy from Neutral after the share price underperformed the REIT sector by -10% over the last three months.
This equity price decline contrasts with growing visibility of both duration and magnitude of earnings, suggests the broker, driven by the group’s $85bn Data Centre development pipeline.
On the topic of potential execution risk, the analysts point to Goodman’s history of managing risk through pre-commitments, strong capital partnerships and a prudent approach to capital management and project selection.
PLATINUM ASSET MANAGEMENT LIMITED ((PTM)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Jarden observes Platinum Asset Management reported weaker than forecast FY24 earnings because of softer revenue and one-off costs.
Although ongoing funds outflows are anticipated, the analyst believes Platinum Asset Management has done a commendable job in right sizing the business, including -$25m in cost outs planned for FY25.
The broker revises EPS forecasts by 5% for FY25 and -9% for FY26. Upgraded to Neutral from underweight. Target price $1 from $1.05.
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CHARTER HALL GROUP ((CHC)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0
Charter Hall, on behalf of Charter Hall Retail REIT ((CQR)) and a trust managed on behalf of Hostplus (50:50 basis), has lodged an on-market takeover bid to acquire 100% of Hotel Property Investments ((HPI)) for $3.65/share.
According to the target’s board, the bid represents a -10% discount to net tangible assets (NTA) and should be rejected by shareholders.
Following the recent share price rally, Moelis downgrades its rating for Charter Hall to Hold from Buy. The unchanged target is $3.89.
CARNARVON ENERGY LIMITED ((CVN)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden adjusts the outlook for Carnarvon Energy on the back of recent commentary from Santos ((STO)) on Dorado.
The analyst points at frustration around the fact the operator of the company’s key asset is flagging a challenging environment, including the decision to lower the risk weighting on Dorado to 75% from 100%.
Jarden maintains its forecasts for the final investment decision date in 2026 and first production in 2030.
Rating downgraded to Overweight from Buy. Target price moves to 21c from 24c.
IMPEDIMED LIMITED ((IPD)) Downgrade to Speculative Buy from Buy by Canaccord Genuity.B/H/S: 0/0/0
Upon further reflection on FY24 results, Canaccord Genuity lowers its target for ImpediMed to 9c from 14c and downgrades to Speculative Buy from Buy.
The analyst adopts a more conservative approach to the cadence of installed base growth, and on management’s ability to drive SaaS pricing increases. Unfortunately, payor wins have not been sufficient to drive Sozo unit sales, explains Canaccord.
Over the last year, the analyst suggests material disruption at both management and board level may have negatively impacted the sales/strategy planning and execution.
The broker’s initial take on FY24 results is summarised below.
FY24 results for ImpediMed were in line with quarterly reporting in July. However, Canaccord Genuity suggests share price pressure reflects a level of impatience as investors await sales execution, with a material uplift in new installed Sozo units remaining elusive.
Management highlighted actions to manage cash burn including a FY25 operating cash spend -10% lower than the FY24 level.
The broker suggests management’s aim to be breakeven by July 2025 is very optimistic, and the analyst’s forecasts assume a capital injection.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | DOMAIN HOLDINGS AUSTRALIA LIMITED | Buy | Buy | Jarden | |
| 2 | GOODMAN GROUP | Buy | Neutral | Jarden | |
| 3 | PLATINUM ASSET MANAGEMENT LIMITED | Neutral | Sell | Jarden | |
| Downgrade | |||||
| 4 | CARNARVON ENERGY LIMITED | Buy | Buy | Jarden | |
| 5 | CHARTER HALL GROUP | Neutral | N/A | Moelis | |
| 6 | IMPEDIMED LIMITED | Buy | Buy | Canaccord Genuity | |
Price Target Changes (Post Thursday Last Week)
| Company | Last Price | Broker | New Target | Old Target | Change | |
|---|---|---|---|---|---|---|
| AND | Ansarada Group | $2.49 | Canaccord Genuity | N/A | 2.20 | -100.00% |
| APE | Eagers Automotive | $10.11 | Canaccord Genuity | 11.00 | 11.70 | -5.98% |
| ARB | ARB Corp | $43.65 | Canaccord Genuity | 38.30 | 35.60 | 7.58% |
| Wilsons | 47.85 | 47.52 | 0.69% | |||
| ASB | Austal | $2.17 | Petra Capital | 3.21 | 3.33 | -3.60% |
| ASX | ASX | $64.50 | Jarden | 59.75 | 61.25 | -2.45% |
| BKT | Black Rock Mining | $0.05 | Petra Capital | 0.21 | 0.20 | 5.00% |
| CAR | CAR Group | $37.30 | Jarden | 31.25 | 28.00 | 11.61% |
| CMM | Capricorn Metals | $5.69 | Canaccord Genuity | 6.50 | 6.65 | -2.26% |
| Goldman Sachs | 5.55 | 5.25 | 5.71% | |||
| Jarden | 6.29 | 6.28 | 0.16% | |||
| CVN | Carnarvon Energy | $0.15 | Jarden | 0.21 | 0.24 | -12.50% |
| DDR | Dicker Data | $9.04 | Petra Capital | 10.71 | 11.29 | -5.14% |
| DGL | DGL Group | $0.49 | Canaccord Genuity | 0.51 | 0.60 | -15.00% |
| DHG | Domain Holdings Australia | $2.84 | Jarden | 3.35 | 3.40 | -1.47% |
| DOW | Downer EDI | $5.66 | Goldman Sachs | 5.50 | 4.80 | 14.58% |
| FCL | Fineos Corp | $1.41 | Goldman Sachs | 1.65 | 1.90 | -13.16% |
| FEX | Fenix Resources | $0.26 | Petra Capital | 0.44 | 0.48 | -8.33% |
| FFM | FireFly Metals | $0.88 | Moelis | 1.15 | 1.00 | 15.00% |
| FSG | Field Solutions | $0.02 | Canaccord Genuity | 0.07 | 0.11 | -36.36% |
| GDG | Generation Development | $2.84 | Petra Capital | 2.95 | 2.78 | 6.12% |
| GMG | Goodman Group | $34.54 | Jarden | 40.00 | 37.60 | 6.38% |
| HVN | Harvey Norman | $4.71 | Jarden | 4.60 | 4.80 | -4.17% |
| IPD | ImpediMed | $0.05 | Canaccord Genuity | 0.09 | 0.14 | -35.71% |
| JBH | JB Hi-Fi | $82.31 | Jarden | 64.80 | 50.50 | 28.32% |
| KED | Keypath Education International | $0.87 | Canaccord Genuity | N/A | 1.10 | -100.00% |
| LOT | Lotus Resources | $0.27 | Petra Capital | 0.37 | 0.41 | -9.76% |
| MTO | Motorcycle Holdings | $1.67 | Moelis | 2.37 | 1.97 | 20.30% |
| MYE | Metarock Group | $0.19 | Petra Capital | 0.36 | 0.35 | 2.86% |
| NXT | NextDC | $17.03 | Canaccord Genuity | 18.85 | 18.50 | 1.89% |
| Goldman Sachs | 18.50 | 19.00 | -2.63% | |||
| OBM | Ora Banda Mining | $0.57 | Canaccord Genuity | 0.65 | 0.51 | 27.45% |
| PMV | Premier Investments | $33.92 | Jarden | 29.80 | 30.80 | -3.25% |
| PTM | Platinum Asset Management | $0.97 | Jarden | 1.00 | 1.05 | -4.76% |
| QBE | QBE Insurance | $16.55 | Goldman Sachs | 20.00 | 21.00 | -4.76% |
| REA | REA Group | $199.36 | Jarden | 164.00 | 161.00 | 1.86% |
| Jarden | 170.00 | 161.00 | 5.59% | |||
| RHC | Ramsay Health Care | $40.20 | Jarden | 48.22 | 64.30 | -25.01% |
| SFR | Sandfire Resources | $8.89 | Goldman Sachs | 8.20 | 8.50 | -3.53% |
| SMR | Stanmore Resources | $2.67 | Petra Capital | 5.32 | 5.46 | -2.56% |
| SVW | Seven Group | $41.18 | Goldman Sachs | 45.90 | 43.90 | 4.56% |
| SYA | Sayona Mining | $0.03 | Petra Capital | 0.14 | 0.15 | -6.67% |
| WES | Wesfarmers | $70.38 | Jarden | 61.20 | 60.70 | 0.82% |
| Company | Last Price | Broker | New Target | Old Target | Change | |
More Highlights
ASB AUSTAL LIMITED
Commercial Services & Supplies Overnight Price: $2.13
Petra Capital rates ((ASB)) as Buy (1)
Petra Capital assesses Austal’s underlying FY24 performance was positive and points out the EBIT margin is already trending higher. Support division revenues and margin were higher, while US shipbuilding delivered a 2.9% margin on lower revenue.
A 424bps EBIT margin gain to 3.9% more than offset lower revenue and higher D&A and interest expenses, explains the broker.
Petra Capital reiterates a Buy rating and the target slips to $3.21 from $3.33.
This report was published on September 2, 2024.
Target price is $3.21 Current Price is $2.13 Difference: $1.08
If ASB meets the Petra Capital target it will return approximately 51% (excluding dividends, fees and charges).
Current consensus price target is $3.13, suggesting upside of 49.0%(ex-dividends)
The company’s fiscal year ends in June.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 3.00 cents and EPS of 11.60 cents.
At the last closing share price the estimated dividend yield is 1.41%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.36.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 13.4, implying annual growth of 226.8%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 15.7.
Forecast for FY26:
Petra Capital forecasts a full year FY26 dividend of 14.50 cents and EPS of 28.70 cents.
At the last closing share price the estimated dividend yield is 6.81%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.42.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 18.0, implying annual growth of 34.3%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 11.7.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
DDR DICKER DATA LIMITED
Hardware & Equipment Overnight Price: $8.90
Petra Capital rates ((DDR)) as Buy (1)
Overall, the 1H performance by Dicker Data was positive and should continue to improve over the next 18 months, according to Petra Capital.
The broker highlights a 2Q growth rate of 8.3% reflected increasing demand across several product categories and further market share gains.
For H2, management expects both revenue and profits will return to growth, driven by the much-anticipated PC refresh, suggests the broker.
Buy retained, and target rises to $10.71 from $10.41.
This report was published on September 2, 2024.
Target price is $10.71 Current Price is $8.90 Difference: $1.81
If DDR meets the Petra Capital target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $10.57, suggesting upside of 19.5%(ex-dividends)
The company’s fiscal year ends in December.
Forecast for FY24:
Petra Capital forecasts a full year FY24 dividend of 45.50 cents and EPS of 45.40 cents.
At the last closing share price the estimated dividend yield is 5.11%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.60.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 45.2, implying annual growth of -0.9%.
Current consensus DPS estimate is 43.6, implying a prospective dividend yield of 4.9%.
Current consensus EPS estimate suggests the PER is 19.6.
Forecast for FY25:
Petra Capital forecasts a full year FY25 dividend of 57.50 cents and EPS of 57.70 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 15.42.How do these forecasts compare to market consensus projections?
Current consensus EPS estimate is 51.2, implying annual growth of 13.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 17.3.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
MTO MOTORCYCLE HOLDINGS LIMITED
Automobiles & Components Overnight Price: $1.66
Moelis rates ((MTO)) as Buy (1)
Motorcycle Holdings reported FY24 results which came in at the upper end of guidance.
Moelis observes revenue met expectations while gross profit margins were slightly lower than anticipated at 26%, against 27% in FY23.
The broker highlights what appears to be some demand recovery post a prolonged period of weakness from Nov 2023 to April 2024, which infers the market might be bottoming.
Management is looking to cost out initiatives for FY25 as well as an improvement in margins.
The analyst lifts EPS forecasts by 20% in FY25 and 30% in FY26. Buy rating unchanged. Target price $2.37.
This report was published on September 2, 2024.
Target price is $2.37 Current Price is $1.66 Difference: $0.715
If MTO meets the Moelis target it will return approximately 43% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.
Forecast for FY25:
Moelis forecasts a full year FY25 dividend of 10.40 cents and EPS of 18.90 cents.
At the last closing share price the estimated dividend yield is 6.28%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.76.
Forecast for FY26:
Moelis forecasts a full year FY26 dividend of 11.20 cents and EPS of 19.90 cents.
At the last closing share price the estimated dividend yield is 6.77%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.32.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
NXG NEXGEN ENERGY LIMITED
Uranium Overnight Price: $8.01
Petra Capital rates ((NXG)) as Buy (1)
Petra Capital believes NexGen Energy’s Rook 1 project is the best underdeveloped uranium project globally, however the company does not have permits which means production is unlikely until FY30, the analyst states.
Management has guided to FY28 production with recent drilling results pointing to another deposit with equivalent ultra high-grade core.
The broker attaches a 30% premium to the net present value and target price, as it is not believed the asset will stay under control of a junior developer.
Buy rated. Target price $12.15.
This report was published on September 6, 2024.
Target price is $12.15 Current Price is $8.01 Difference: $4.14
If NXG meets the Petra Capital target it will return approximately 52% (excluding dividends, fees and charges).
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources
PDN PALADIN ENERGY LIMITED
Uranium Overnight Price: $9.79
Canaccord Genuity rates ((PDN)) as Buy (1)
In a highly positive development for Paladin Energy, suggests Canaccord Genuity, Fission Uranium shareholders have approved the proposed acquisition by Paladin. The company now becomes the third-largest listed uranium resource owner globally with 544mlbs.
The transaction not only builds scale and provides medium-term production growth, highlights the broker, but also will likely result in bringing Paladin down the cost curve.
Buy rating and $16.50 target.
This report was published on September 10, 2024.
Target price is $16.50 Current Price is $9.79 Difference: $6.71
If PDN meets the Canaccord Genuity target it will return approximately 69% (excluding dividends, fees and charges).
Current consensus price target is $14.93, suggesting upside of 52.5%(ex-dividends)
Forecast for FY25:
Current consensus EPS estimate is 50.3, implying annual growth of N/A.
Current consensus DPS estimate is 2.2, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 19.5.
Forecast for FY26:
Current consensus EPS estimate is 107.5, implying annual growth of 113.7%.
Current consensus DPS estimate is 35.8, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 9.1.
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
SGLLV RICEGROWERS LIMITED
Food, Beverages & Tobacco Overnight Price: $8.55
Canaccord Genuity rates ((SGLLV)) as Buy (1)
A highlight from the Ricegrowers AGM, according to Canaccord Genuity, was the $3bn aspirational target for 2030 revenue, which
suggests an 8% compound annual growth rate (CAGR).
“Following a strong year of growth in FY24, the SunRice Group will seek to repeat the exceptional performance at both the top and bottom line in FY25”, noted management.
The broker rates Ricegrowers as Buy with an unchanged $10 target.
This report was published on September 6, 2024.
Target price is $10.00 Current Price is $8.55 Difference: $1.45
If SGLLV meets the Canaccord Genuity target it will return approximately 17% (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 6.43%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.22.
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 6.67%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.14.
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: CHC - CHARTER HALL GROUP
For more info SHARE ANALYSIS: CQR - CHARTER HALL RETAIL REIT
For more info SHARE ANALYSIS: CVN - CARNARVON ENERGY LIMITED
For more info SHARE ANALYSIS: DHG - DOMAIN HOLDINGS AUSTRALIA LIMITED
For more info SHARE ANALYSIS: GMG - GOODMAN GROUP
For more info SHARE ANALYSIS: HPI - HOTEL PROPERTY INVESTMENTS LIMITED
For more info SHARE ANALYSIS: IPD - IMPEDIMED LIMITED
For more info SHARE ANALYSIS: PTM - PLATINUM ASSET MANAGEMENT LIMITED
For more info SHARE ANALYSIS: STO - SANTOS LIMITED