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In Case You Missed It – BC Extra Upgrades & Downgrades – 11-10-24

Weekly Reports | Oct 11 2024

This story features CHAMPION IRON LIMITED, and other companies. For more info SHARE ANALYSIS: CIA

Broker Rating Changes (Post Thursday Last Week)

Downgrade

CHAMPION IRON LIMITED ((CIA)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Jarden lowers its target for Champion Iron to $6.91 from $7.47 and downgrades to Overweight from Buy.

The target falls due to a – 7% reduction in the broker’s FY27 P65 grade (65% iron content) price average forecast, offset marginally by a lower assumed weighted average cost of capital (WACC).

The analysts forecast a price realisation for 66.2% Bloom Lake concentrate of US$120.8/dmt compared to the US$126.1/dmt average for the June quarter.

Underpinning the broker’s Overweight rating, is the new DRPF 69% iron project which is progressing well, notes the broker. The low impurity DRPF product is a strategic differentiator helping achieve materially improved prices, explains Jarden.

TECHNOLOGY ONE LIMITED ((TNE)) Downgrade to Neutral from Buy by Goldman Sachs.B/H/S: 0/0/0

Since adding TechnologyOne to a Buy rating on June 26, 2023, Goldman Sachs points to a 61% rally in the share price versus the ASX200 which is up 16%.

The stock has re-rated to a price-to-earnings valuation of 56x from 40x since the May 2024 results. The broker notes the stock is now trading above the upgraded share price target of $24.05, hence the downgrade to Neutral from Buy.

Goldman Sachs explains growth in annual recurring revenue is around mid-teens out to FY30, supporting $1bn in annual recurring revenue. With SaaS margins over 80%, profit before tax growth rate of 15%-20% is viewed as the “new normal”.

The broker is looking to FY24 results in November for further indications of momentum in UK or cross-selling of its SaaS.

Order Company New Rating Old Rating Broker
Downgrade
1 CHAMPION IRON LIMITED Buy Buy Jarden
2 TECHNOLOGY ONE LIMITED Neutral Buy Goldman Sachs

Price Target Changes (Post Thursday Last Week)

Company Last Price Broker New Target Old Target Change
ALD Ampol $30.25 Goldman Sachs 35.60 36.80 -3.26%
AMP AMP $1.32 Jarden 1.35 1.30 3.85%
ASX ASX $65.98 Goldman Sachs 59.50 59.00 0.85%
BMT Beamtree Holdings $0.30 Petra Capital 0.56 0.54 3.70%
CGF Challenger $6.65 Jarden 7.90 7.80 1.28%
CIA Champion Iron $6.74 Jarden 6.91 7.47 -7.50%
CMM Capricorn Metals $5.77 Jarden 6.62 6.29 5.25%
CPU Computershare $26.27 Goldman Sachs 30.00 31.00 -3.23%
DOW Downer EDI $5.44 Goldman Sachs N/A 5.50 -100.00%
FCL Fineos Corp $1.38 Moelis 1.80 2.21 -18.55%
GQG GQG Partners $2.70 Goldman Sachs 3.00 3.05 -1.64%
HMC HMC Capital $8.77 Goldman Sachs 8.94 N/A
HUB Hub24 $63.53 Jarden 47.30 44.20 7.01%
Wilsons 74.41 56.20 32.40%
IFL Insignia Financial $2.79 Jarden 3.30 2.85 15.79%
JDO Judo Capital $1.71 Goldman Sachs 1.71 1.72 -0.58%
KAR Karoon Energy $1.55 Goldman Sachs 2.20 2.38 -7.56%
LNW Light & Wonder $143.50 Jarden 174.00 175.00 -0.57%
LOT Lotus Resources $0.27 Petra Capital 0.36 0.33 9.09%
MAC Metals Acquisition $18.40 Wilsons 23.50 24.00 -2.08%
MFG Magellan Financial $10.44 Goldman Sachs 10.10 10.00 1.00%
Jarden 10.00 9.70 3.09%
NWL Netwealth Group $27.16 Jarden 18.20 17.20 5.81%
Wilsons 25.16 21.04 19.58%
PPT Perpetual $19.51 Jarden 22.35 21.85 2.29%
PTM Platinum Asset Management $1.22 Jarden 0.94 1.00 -6.00%
QUB Qube Holdings $3.83 Goldman Sachs N/A 4.20 -100.00%
SGM Sims $12.84 Jarden 12.70 12.50 1.60%
STN Saturn Metals $0.28 Petra Capital 0.77 0.78 -1.28%
TCL Transurban Group $13.14 Goldman Sachs N/A 13.10 -100.00%
TNE TechnologyOne $24.48 Goldman Sachs 24.05 19.70 22.08%
Company Last Price Broker New Target Old Target Change

More Highlights

BMT    BEAMTREE HOLDINGS LIMITED

Healthcare services Overnight Price: $0.30

Petra Capital rates ((BMT)) as Buy (1)

Petra Capital predicts the share price for Beamtree Holdings will re-rate after a symbolic but strategic $0.5m contract win in the Kingdom of Saudi Arabia with the Centre for National Health Insurance (CNHI). Further downstream recurring revenue opportunities are expected.

As the CNHI is effectively the counterparty (payer) to the hospital network, the broker anticipates an on-ramp opportunity to deploy the company’s performance indicators for coding quality (PICQ) tool inside around 400 hospitals in the Kingdom.

Target rises to 56c from 54c. Buy.

This report was published on October 4, 2024.

Target price is $0.56 Current Price is $0.30 Difference: $0.26
If BMT meets the Petra Capital target it will return approximately 87% (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 0.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 100.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 1.70 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 17.65.

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

FCL    FINEOS CORPORATION HOLDINGS PLC

Cloud services Overnight Price: $1.40

Moelis rates ((FCL)) as Initiation of coverage with Buy (1)

Insurers seeking an edge in a competitive environment from disruptors and private equity look favourably upon what Fineos Corp has to offer, observes Moelis.

The company’s software platforms and modules provide Life, Accident and Health (LA&H) Insurers products on SaaS based IT architecture.

These offerings promote agile operations at insurers and the capacity to deliver services to clients at lower cost, explains the broker.

Moelis begins research coverage with a Buy rating and $1.80 target. The broker likes the company’s comprehensive product suite, which now includes New Business Underwriting.

This report was published on October 3, 2024.

Target price is $1.80 Current Price is $1.40 Difference: $0.4
If FCL meets the Moelis target it will return approximately 29% (excluding dividends, fees and charges).
The company’s fiscal year ends in December.

Forecast for FY24:

Moelis forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 5.42 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 25.82.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 2.63 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 53.25.

This company reports in EUR. 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

HUB    HUB24 LIMITED

Wealth Management & Investments Overnight Price: $62.06

Wilsons rates ((HUB)) as Overweight (1)

Wilsons upgrades its funds under administration (FUA) forecasts by 1-2% for Hub24 and Netwealth Group following a strong rally for domestic equities in the latter half of the September quarter. US Indices were more neutral after considering translation impacts.

The improved market sentiment and flow opportunity environment should remain positive, in the broker’s view.

Wilsons raises its target for Hub24 to $74.41 from $56.20. The broker’s valuation year is rolled-forward to FY26 to better capture the full benefit of what is expected to be another strong year. Overweight.

This report was published on October 9, 2024.

Target price is $74.41 Current Price is $62.06 Difference: $12.35
If HUB meets the Wilsons target it will return approximately 20% (excluding dividends, fees and charges).
Current consensus price target is $55.30, suggesting downside of -13.7%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 51.00 cents and EPS of 117.30 cents.
At the last closing share price the estimated dividend yield is 0.82%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 52.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 109.0, implying annual growth of 87.4%.
Current consensus DPS estimate is 51.9, implying a prospective dividend yield of 0.8%.
Current consensus EPS estimate suggests the PER is 58.8.

Forecast for FY26:

Wilsons forecasts a full year FY26 dividend of 65.00 cents and EPS of 151.40 cents.
At the last closing share price the estimated dividend yield is 1.05%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 40.99.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 130.1, implying annual growth of 19.4%.
Current consensus DPS estimate is 63.5, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 49.2.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

IEL    IDP EDUCATION LIMITED

Education & Tuition Overnight Price: $15.03

Jarden rates ((IEL)) as Overweight (2)

Jarden highlights IDP Education has scope to outperform industry volumes in FY25 with the potential to increase market share to offset the adverse impacts of lower student volumes, replicating the same trend achieved in the FY24 results.

The analyst also believes there is limited downside risks to EPS in FY25 and views the current fiscal year as a trough in the earnings cycle with scope for a recovery in earnings growth over FY26/FY27.

Jarden reiterates Overweight rating and $19.60 target price. There are no changes to the broker’s earnings forecasts.

This report was published on October 9, 2024.

Target price is $19.60 Current Price is $15.03 Difference: $4.57
If IEL meets the Jarden target it will return approximately 30% (excluding dividends, fees and charges).
Current consensus price target is $18.04, suggesting upside of 19.5%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 30.50 cents and EPS of 46.90 cents.
At the last closing share price the estimated dividend yield is 2.03%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 32.05.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 47.4, implying annual growth of -0.6%.
Current consensus DPS estimate is 34.2, implying a prospective dividend yield of 2.3%.
Current consensus EPS estimate suggests the PER is 31.9.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 35.70 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 2.38%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 27.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.3, implying annual growth of 12.4%.
Current consensus DPS estimate is 39.9, implying a prospective dividend yield of 2.6%.
Current consensus EPS estimate suggests the PER is 28.3.

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

LNW    LIGHT & WONDER INC

Gaming Overnight Price: $143.04

Jarden rates ((LNW)) as Buy (1)

Importantly, suggests Jarden, management has wrested back the narrative heading into the Global Gaming Exhibition, the world’s largest trade show. CEO Matt Wilson has issued a statement via video relating to the Dragon Train injunction and mitigating steps.

The potential -5% negative earnings impact of Dragon Train has resulted in a market overreaction, according to the broker, with the share price falling by -24%. Management has confirmed FY25 guidance of US$1.4bn AEBITDA.

Buy rating remains. Target price declines to $174 from $175.

This report was published on October 7, 2024.

Target price is $174.00 Current Price is $143.04 Difference: $30.96
If LNW meets the Jarden target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $169.20, 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 0.00 cents and EPS of 444.90 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 32.15.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 448.7, implying annual growth of 66.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 32.0.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 588.70 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 24.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 598.2, implying annual growth of 33.3%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 24.0.

Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

OCL    OBJECTIVE CORPORATION LIMITED

IT & Support Overnight Price: $15.17

Moelis rates ((OCL)) as Initiation of coverage with Buy (1)

Moelis initiates coverage on Objective Corp with a Buy rating and target price of $17.60, more than 20% above the $14.46 average of three covering brokers in the FNArena database.

The company provides software to help organisations govern, manage and protect data, explains the broker.

The strength of customer relationships and the experience of management is evident, suggests the analyst, from ongoing revenue and earnings growth in a competitive segment.

At the same time, Objective has been managing the transition to SaaS services from on-premise licence sales.

Moelis anticipates near-term earnings growth via new client wins and existing client upsell, while longer-term earnings should emanate from expansion into new lines of business and geographies.

This report was published on October 3, 2024.

Target price is $17.60 Current Price is $15.17 Difference: $2.43
If OCL meets the Moelis target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $14.47, suggesting downside of -4.2%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 17.80 cents and EPS of 34.40 cents.
At the last closing share price the estimated dividend yield is 1.17%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 44.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 36.3, implying annual growth of 10.3%.
Current consensus DPS estimate is 18.4, implying a prospective dividend yield of 1.2%.
Current consensus EPS estimate suggests the PER is 41.6.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 20.70 cents and EPS of 40.20 cents.
At the last closing share price the estimated dividend yield is 1.36%.
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 41.5, implying annual growth of 14.3%.
Current consensus DPS estimate is 20.0, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 36.4.

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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