Australian Broker Call *Extra* Edition – Sep 19, 2024

This story features BLACK ROCK MINING LIMITED, and other companies. For more info SHARE ANALYSIS: BKT

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)

BKT   CCX   CHL   COI   IPL   JAN   NHC   PTM   TLX   TWE   WGX (2)   XRO  

BKT    BLACK ROCK MINING LIMITED

New Battery Elements – Overnight Price: $0.05

Petra Capital rates ((BKT)) as Buy (1) –

In another significant milestone, according to Petra Capital, (as expected) management at Black Rock Mining has signed project
financing and related debt commitments with several banks in Johannesburg.

A total of US$179m will cover the debt portion of capex for Mahenge Phase 1 plus all of the other related funding requirements like working capital and guarantees, explains the broker.

Management has been able to complete financing at competitive rates, highlights the analyst, despite the weak graphite market.

The Buy rating and 21c target price are maintained.

This report was published on September 18, 2024.

Target price is $0.21 Current Price is $0.05 Difference: $0.156
If BKT meets the Petra Capital target it will return approximately 289% (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 0.10 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 54.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 0.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 18.00.

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

CCX    CITY CHIC COLLECTIVE LIMITED

Apparel & Footwear – Overnight Price: $0.12

Canaccord Genuity rates ((CCX)) as Buy (1) –

After analysing the universe of ASX-listed technology stocks (62 in number), Canaccord Genuity concludes revenue growth
over the medium/long-term and the free cash flow (FCF) margin should be the only relevant measures of stock valuation.

By other names these combined metrics produce the “rule-of-40” or an efficiency score (ES), which adds together a company’s revenue growth and its FCF margin.

The six stocks identified by the broker which generated a world-leading efficiency score greater than 55% were Pro Medicus, REA Group, Jumbo Interactive, Netwealth Group, Car Group and WiseTech Global.

While perceived quality directly translates to valuation, it is ultimately the delta in a stock’s efficiency score that drives share price performance, highlights Canaccord Genuity.

For City Chic Collective, the Speculative Buy rating and 40c target are maintained.

This report was published on September 18, 2024.

Target price is $0.30 Current Price is $0.12 Difference: $0.185
If CCX meets the Canaccord Genuity target it will return approximately 161% (excluding dividends, fees and charges).

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

CHL    CAMPLIFY HOLDINGS LIMITED

Travel, Leisure & Tourism – Overnight Price: $1.33

Canaccord Genuity rates ((CHL)) as Buy (1) –

After analysing the universe of ASX-listed technology stocks (62 in number), Canaccord Genuity concludes revenue growth
over the medium/long-term and the free cash flow (FCF) margin should be the only relevant measures of stock valuation.

By other names these combined metrics produce the “rule-of-40” or an efficiency score (ES), which adds together a company’s revenue growth and its FCF margin.

The six stocks identified by the broker which generated a world-leading efficiency score greater than 55% were Pro Medicus, REA Group, Jumbo Interactive, Netwealth Group, Carsales and WiseTech Global.

While perceived quality directly translates to valuation, it is ultimately the delta in a stock’s efficiency score that drives share price performance, highlights Canaccord Genuity.

For Camplify Holdings, the $2.40 target and Buy rating are maintained.

This report was published on September 18, 2024.

Target price is $2.40 Current Price is $1.33 Difference: $1.07
If CHL meets the Canaccord Genuity target it will return approximately 80% (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

COI    COMET RIDGE LIMITED

NatGas – Overnight Price: $0.17

Canaccord Genuity rates ((COI)) as Buy (1) –

Commentary within an update for Mahalo Gas by Comet Ridge indicates to Canaccord Genuity management is backing down on recent statements targeting front-end engineering design (FEED) entry in the current quarter.

The analysts are not overly surprised by this update given the number of delays this project has previously confronted, and no longer expect the Mahalo joint venture will be able to sanction the project in 2024.

In brighter news for Mahalo North, the broker notes management is currently progressing applications for state and federal approvals.

The Hold rating and 17c target are maintained.

This report was published on September 18, 2024.

Target price is $0.17 Current Price is $0.17 Difference: $0
If COI meets the Canaccord Genuity target it will return approximately 0% (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

IPL    INCITEC PIVOT LIMITED

Agriculture – Overnight Price: $3.08

Goldman Sachs rates ((IPL)) as Buy (1) –

Goldman Sachs notes no change in the FY24 outlook for Incitec Pivot post the Investor Day except a one-off -$10m corporate cost.

Management continues to review the fertiliser business considering whether it will be sold in parts or in totality.

Incitec Pivot is looking for $300m in incremental savings with around 45% to 55% from a new operating model, the broker highlights with supply chain improvements and fixed cost reductions.

Some 25%-30% is estimated to come from commercial sources including a better technology offering and customer re-contracting.

Growth levers are forecast to generate 15%-25% with investment in technology.

The stock remains Buy rated with a $3.35 target price.

This report was published on September 17, 2024.

Target price is $3.35 Current Price is $3.08 Difference: $0.27
If IPL meets the Goldman Sachs target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $3.07, suggesting downside of -0.4%(ex-dividends)
The company’s fiscal year ends in September.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 10.00 cents and EPS of 19.00 cents.
At the last closing share price the estimated dividend yield is 3.25%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 16.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.1, implying annual growth of -33.7%.
Current consensus DPS estimate is 13.3, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 16.1.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 10.00 cents and EPS of 21.00 cents.
At the last closing share price the estimated dividend yield is 3.25%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.0, implying annual growth of 4.7%.
Current consensus DPS estimate is 10.2, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 15.4.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

JAN    JANISON EDUCATION GROUP LIMITED

Education & Tuition – Overnight Price: $0.20

Wilsons rates ((JAN)) as Market Weight (3) –

Janison Education offered a strategic review which met Wilsons’ expectations as the company focuses on the Core assessment platform and de-emphasising the lower margin businesses.

Management did not provide any quantitative guidance. The broker highlights a focus on cost-outs and top-line growth being re-established with a focus on existing customers.

The NSW Department of Education win is expected to add “meaningfully” through FY25.

Market weight retained. Target price 25c.

This report was published on September 17, 2024.

Target price is $0.25 Current Price is $0.20 Difference: $0.05
If JAN meets the Wilsons target it will return approximately 25% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.40 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 5.88.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 1.50 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 13.33.

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

NHC    NEW HOPE CORPORATION LIMITED

Coal – Overnight Price: $4.52

Goldman Sachs rates ((NHC)) as Sell (5) –

New Hope reported FY24 net profit of $476m which was generally in line with Goldman Sachs’ expectations. A 22cps dividend came in higher than the analyst’s forecast of 17.8cps, reflecting an 80% payout ratio.

The broker notes Bengalla’s performance met expectations as did New Acland.

Management updated five year and longer-term production guidance. The broker points to higher volumes and a faster than anticipated ramp up of New Acland and Maxwell mines.

The company listed the Bridgeport oil and gas assets for sale at $101m and finished the year with net cash of $430m.

Sell rating with a $3.80 target price unchanged.

This report was published on September 19, 2024.

Target price is $3.80 Current Price is $4.52 Difference: minus $0.72 (current price is over target).
If NHC meets the Goldman Sachs target it will return approximately minus 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $4.95, suggesting upside of 9.5%(ex-dividends)
The company’s fiscal year ends in July.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 31.00 cents and EPS of 52.00 cents.
At the last closing share price the estimated dividend yield is 6.86%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 61.7, implying annual growth of 9.6%.
Current consensus DPS estimate is 35.4, implying a prospective dividend yield of 7.8%.
Current consensus EPS estimate suggests the PER is 7.3.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 23.00 cents and EPS of 39.00 cents.
At the last closing share price the estimated dividend yield is 5.09%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.59.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 49.2, implying annual growth of -20.3%.
Current consensus DPS estimate is 28.0, implying a prospective dividend yield of 6.2%.
Current consensus EPS estimate suggests the PER is 9.2.

Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

PTM    PLATINUM ASSET MANAGEMENT LIMITED

Wealth Management & Investments – Overnight Price: $1.10

Goldman Sachs rates ((PTM)) as Sell (5) –

Goldman Sachs notes Platinum Asset Management has received a non-binding indicative proposal from Regal Partners ((RPL)) to acquire the company.

The offer is subject to due diligence and earnings accretive to the Regal shareholders. The broker highlights Platinum Asset Management shareholders will receive 0.274 Regal shares for each Platinum share.

The proposal also gives Platinum the right to pay a special franked dividend of 24cps prior to the scheme of arrangement with the consideration paid by Regal lowered by Platinum final’s 4cps dividend and any other dividend.

The stock remains Sell rated with a $1 target price.

This report was published on September 18, 2024.

Target price is $1.00 Current Price is $1.10 Difference: minus $0.1 (current price is over target).
If PTM meets the Goldman Sachs target it will return approximately minus 9% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $1.00, suggesting downside of -8.9%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 8.50 cents and EPS of 9.00 cents.
At the last closing share price the estimated dividend yield is 7.73%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.22.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 8.6, implying annual growth of 8.2%.
Current consensus DPS estimate is 8.6, implying a prospective dividend yield of 7.8%.
Current consensus EPS estimate suggests the PER is 12.8.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 8.00 cents and EPS of 8.00 cents.
At the last closing share price the estimated dividend yield is 7.27%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 13.75.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.9, implying annual growth of -19.8%.
Current consensus DPS estimate is 9.0, implying a prospective dividend yield of 8.2%.
Current consensus EPS estimate suggests the PER is 15.9.

Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

TLX    TELIX PHARMACEUTICALS LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $17.85

Wilsons rates ((TLX)) as Overweight (1) –

Wilsons correlates the movement in Telix Pharmaceuticals’ share price to new data announced at the European Society for Medical Oncology 2024 congress over the weekend.

The broker highlights the information relates to progress in hormone sensitive prostate cancer where Bayer and Novartis had positive results.

Hormone sensitive prostate cancer is a smaller piece of the prostate cancer total addressable market the analyst notes, but it goes into Telix Pharmaceuticals’ target markets.

Overweight retained. Target is steady at $22.

This report was published on September 17, 2024.

Target price is $22.00 Current Price is $17.85 Difference: $4.15
If TLX meets the Wilsons target it will return approximately 23% (excluding dividends, fees and charges).
The company’s fiscal year ends in December.

Forecast for FY24:

Wilsons forecasts a full year FY24 dividend of 0.00 cents and EPS of 19.40 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 92.01.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 28.80 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 61.98.

Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

TWE    TREASURY WINE ESTATES LIMITED

Food, Beverages & Tobacco – Overnight Price: $11.23

Goldman Sachs rates ((TWE)) as Buy (1) –

Goldman Sachs reviews the latest NielsenIQ scan data and highlights it only covers around 50% of retail sales in the US.

The latest data insights do offer a trend, the broker notes. Sales for the four weeks to September 7 were mixed with 19 Crimes revealing slightly weaker pricing and better volumes.

Treasury Wine Estates US sales ex-Daou were down -5% year-on-year versus a fall of -2% for the US wine market, the analyst points to an improvement against the previous four weeks.

Goldman Sachs believes the results were “positive” for the group. Buy rating and $15.20 target maintained. No change to earnings forecasts.

This report was published on September 19, 2024.

Target price is $15.20 Current Price is $11.23 Difference: $3.97
If TWE meets the Goldman Sachs target it will return approximately 35% (excluding dividends, fees and charges).
Current consensus price target is $13.71, suggesting upside of 22.1%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 42.00 cents and EPS of 60.00 cents.
At the last closing share price the estimated dividend yield is 3.74%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 61.7, implying annual growth of 385.8%.
Current consensus DPS estimate is 41.4, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 18.2.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 50.00 cents and EPS of 71.00 cents.
At the last closing share price the estimated dividend yield is 4.45%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 71.5, implying annual growth of 15.9%.
Current consensus DPS estimate is 48.1, implying a prospective dividend yield of 4.3%.
Current consensus EPS estimate suggests the PER is 15.7.

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

WGX    WESTGOLD RESOURCES LIMITED

Gold & Silver – Overnight Price: $2.65

Canaccord Genuity rates ((WGX)) as Buy (1) –

Following the merger of Westgold Resources with Karora Resources which completed on August 1, management has provided group
FY25 production guidance of 400-420koz at a cost (AISC) of between $2,000-2,300/oz.

This guidance is broadly in line with prior forecasts by Canaccord Genuity and consensus.

In a ‘peak year’ for growth capex, according to management, guidance in FY25 is 7% higher-than-expected by the broker.

The Buy rating is maintained, and the target reduced to $3.50 from $3.55.

This report was published on September 18, 2024.

Target price is $3.50 Current Price is $2.65 Difference: $0.85
If WGX meets the Canaccord Genuity target it will return approximately 32% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 2.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 0.75%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.57.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 2.00 cents and EPS of 48.00 cents.
At the last closing share price the estimated dividend yield is 0.75%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.52.

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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Petra Capital rates ((WGX)) as Buy (1) –

Petra Capital forecasts FY26 production of 520koz for Westgold Resources which would lift the company to be the third-largest producer on the ASX.

This week, management guided to FY25 production of 400-420koz –which will be back ended– as several mines ramp-up.

As synergy benefits are crystallised and output rises, the broker notes a falling cost (AISC) profile for Westgold at the same time as capex is peaking.

The target for Westgold Resources falls to $3.60 from $3.75. Buy.

This report was published on September 18, 2024.

Target price is $3.60 Current Price is $2.65 Difference: $0.95
If WGX meets the Petra Capital target it will return approximately 36% (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 10.00 cents and EPS of 21.20 cents.
At the last closing share price the estimated dividend yield is 3.77%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.50.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 12.00 cents and EPS of 47.00 cents.
At the last closing share price the estimated dividend yield is 4.53%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.64.

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

XRO    XERO LIMITED

Accountancy – Overnight Price: $147.85

Wilsons rates ((XRO)) as Market Weight (3) –

Wilsons places its earnings forecasts for Xero under review after the announced acquisition of Syft Analytics for -US$70m.

Syft is a leading global cloud-based reporting, insights and analytics platform used (in over 80 countries) by accountants, bookkeepers, and small businesses, observes the broker.

Xero has been utilising AI and machine learning for some time, but the analysts explain how Syft capabilities could add more valuable insights for their customers combined with Xero’s GenAI-driven assistant “JAX” (Just Ask Xero’).

Market Weight. Target $131.63.

This report was published on September 18, 2024.

Target price is $131.63 Current Price is $147.85 Difference: minus $16.22 (current price is over target).
If XRO meets the Wilsons target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $161.43, suggesting upside of 9.2%(ex-dividends)
The company’s fiscal year ends in March.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 230.03 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 64.27.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 139.1, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 106.3.

Forecast for FY26:

Wilsons forecasts a full year FY26 dividend of 0.00 cents and EPS of 289.34 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 51.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 184.3, implying annual growth of 32.5%.
Current consensus DPS estimate is 13.6, implying a prospective dividend yield of 0.1%.
Current consensus EPS estimate suggests the PER is 80.2.

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

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