Australian Broker Call *Extra* Edition – Sep 26, 2024

Daily Market Reports | Sep 26 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)

ASB   CAJ   COL (2)   CXO   DUG   FBU   HLS   IDX   INR   IPD   JIN   JLG (2)   KCN   KMD   LNW   MAQ   NEU   NZK   PDN   PYC   SHV   SKC   SMI   SPK   TAH   TLX   WOW (2)  

ASB    AUSTAL LIMITED

Commercial Services & Supplies - Overnight Price: $3.00

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

Petra Capital forecasts Austal's earnings (EBIT) will rise by around $30m/year over an extended period after securing a new submarine module fabrication contract with General Dynamics Electric Boat (GDEB).

Austal will receive US$450m of special US Navy incentives to build (and own) the requisite fabrication facilities at its shipyard in Mobile, Alabama.

The broker reiterates its Buy rating, and the target rise to $3.23 from $3.21.

This report was published on September 25, 2024.

Target price is $3.23 Current Price is $3.00 Difference: $0.23
If ASB meets the Petra Capital target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $3.26, suggesting upside of 12.5%(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 11.10 cents.
At the last closing share price the estimated dividend yield is 1.00%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 27.03.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.5, implying annual growth of 229.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 21.5.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 12.50 cents and EPS of 25.10 cents.
At the last closing share price the estimated dividend yield is 4.17%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.95.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, implying annual growth of 33.3%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 16.1.

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

CAJ    CAPITOL HEALTH LIMITED

Healthcare services - Overnight Price: $0.35

Canaccord Genuity rates ((CAJ)) as Hold (3) -

Given separate regional concentration, Canaccord Genuity doesn't anticipate any regulatory problems for the Capitol Health/Integral Diagnostics tie-in, which is set for November, pending shareholder approval.

The analysts see potential for material margin expansion via referring benefits and further structural cost-savings (i.e. incorporating the teleradiology offering across the enterprise).

The broker's Hold rating and 32c target are maintained for Capitol Health.

This report was published on September 25, 2024.

Target price is $0.32 Current Price is $0.35 Difference: minus $0.03 (current price is over target).
If CAJ meets the Canaccord Genuity target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.33, suggesting downside of -7.0%(ex-dividends)

Forecast for FY25:

Current consensus EPS estimate is 31.9, implying annual growth of N/A.
Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 2.9%.
Current consensus EPS estimate suggests the PER is 1.1.

Forecast for FY26:

Current consensus EPS estimate is 39.8, implying annual growth of 24.8%.
Current consensus DPS estimate is 1.2, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 0.9.

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

COL    COLES GROUP LIMITED

Food, Beverages & Tobacco - Overnight Price: $18.09

Goldman Sachs rates ((COL)) as Neutral (3) -

Goldman Sachs notes the ACCC announcement to commence separate legal proceedings in the Federal Court into alleged breach of Australian Consumer Law for Coles Group and Woolworths Group ((WOW)) in misleading consumers on discount pricing claims on hundreds of supermarket goods.

The broker notes Coles Group had 245 products sold as part of the Down Down program for 15 months from 2022 to 2023.

Coles Group has announced its intentions to defend the allegations.

The analyst believes there is risk from negative consumer sentiment towards the major supermarkets which may have adverse impacts on sales.

No change to Neutral rating and $18 target price.

This report was published on September 23, 2024.

Target price is $18.00 Current Price is $18.09 Difference: minus $0.09 (current price is over target).
If COL meets the Goldman Sachs target it will return approximately minus 0% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $20.11, suggesting upside of 10.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 64.00 cents and EPS of 80.00 cents.
At the last closing share price the estimated dividend yield is 3.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 22.61.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.0, implying annual growth of 2.6%.
Current consensus DPS estimate is 70.3, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 21.2.

Forecast for FY26:

Current consensus EPS estimate is 97.6, implying annual growth of 13.5%.
Current consensus DPS estimate is 80.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 18.6.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Jarden rates ((COL)) as Neutral (3) -

Coles Group intends to defend proceedings launched by the ACCC for allegedly misleading consumers over the discounting applied to circa 500 products (includes tally for simultaneous action against Woolworths Group) over a 15-month period prior to May 2023. 

Jarden highlights potential fines for each breach could incur the maximum penalty of -$50m, or reasonably attributable benefit, or, if not determined, 30% of adjusted turnover.

While such near-term noise is not helpful, Jarden sees limited impact in the longer-term.

No change to Neutral rating and $17.10 target price.

This report was published on September 24, 2024.

Target price is $17.10 Current Price is $18.09 Difference: minus $0.99 (current price is over target).
If COL meets the Jarden target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $20.11, suggesting upside of 10.5%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 69.00 cents and EPS of 84.50 cents.
At the last closing share price the estimated dividend yield is 3.81%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 21.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.0, implying annual growth of 2.6%.
Current consensus DPS estimate is 70.3, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 21.2.

Forecast for FY26:

Jarden forecasts a full year FY26 EPS of 95.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 18.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 97.6, implying annual growth of 13.5%.
Current consensus DPS estimate is 80.3, implying a prospective dividend yield of 4.4%.
Current consensus EPS estimate suggests the PER is 18.6.

Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

CXO    CORE LITHIUM LIMITED

New Battery Elements - Overnight Price: $0.10

Jarden rates ((CXO)) as Downgrade to Sell from Neutral (5) -

Jarden lowers its target for Core Lithium to 8c from 10c and downgrades to Sell from Neutral after revised forecasts for the Finniss hard rock lithium mine introduced the need for around $250m of new funding and working capital.

These changes are made despite the apparently positive announcement of a 223% increase to BP33, the potential second ore source to feed the Finniss operations, explains the broker.

In the absence of compelling and plausibly funded project economics to provide valuation support, the analysts suggest Core Lithium is increasingly an exposure to exploration.

This report was published on September 26, 2024.

Target price is $0.08 Current Price is $0.10 Difference: minus $0.02 (current price is over target).
If CXO meets the Jarden target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $0.09, suggesting downside of -10.0%(ex-dividends)
The company's fiscal year ends in June.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 10.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 0.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -3.7, 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 N/A.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.60 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 16.67.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.4, 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 N/A.

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