In Case You Missed It – BC Extra Upgrades & Downgrades – 01-11-24

This story features ADAIRS LIMITED, and other companies. For more info SHARE ANALYSIS: ADH

Broker Rating Changes (Post Thursday Last Week)

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ADAIRS LIMITED ((ADH)) Buy by Canaccord Genuity.B/H/S: 0/0/0

Adairs’ trading update pleased Canaccord Genuity, with a particularly strong sales performance the highlight, complemented by gross margins pacing ahead of a year ago despite headwinds from FX and initial impacts from higher freight costs.

The broker remains optimistic on the near-term outlook, while cautioning that we are entering peak retail trading at year-end. Canaccord has taken the view that management’s initiatives to turn around Adairs  and Mocka will outweigh continuing cost of living pressures.

The broker is nonetheless cautious on Focus forecasts given weak recent trading. In the medium term, Canaccord sees material top-line optionality and room for operating leverage. Target rises to $2.80 from $2.50, Buy retained.

MICHAEL HILL INTERNATIONAL LIMITED ((MHJ)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0

Jarden comments Michael Hill has shown improved trading momentum in the first 14 weeks of FY25, with group sales growth accelerating to 4.3% year-on-year, up from 3.2% in the first eight weeks.

As per the broker, Australia and Canada led the way with strong same-store sales growth of 6.3% and 4.7%, respectively, while New Zealand’s same-store sales contracted by -4.2%, though this represents an improvement from -6.2% previously.

Gross margin has also shown a “meaningful improvement,” and management remains confident in achieving the FY25 gross margin target of circa 62%.

The broker has upgraded its rating to Buy from Overweight and raised the price target to NZ$0.80 from NZ$0.78, driven by positive earnings revisions and margin recovery progress.

PREMIER INVESTMENTS LIMITED ((PMV)) Upgrade to Neutral from Sell by Goldman Sachs.B/H/S: 0/0/0

Goldman Sachs believes there is greater visibility on Premier Investments’ earnings.

The analyst expects higher EBIT margins for Peter Alexander and Smiggle as well as a clearer growth path for Apparel Brands.

The analyst lifts FY25-27 EPS estimates by -1% to 10%, respectively. A more omni-channel sales model for Apparel should help a turnaround in declining market share via data and loyalty led strategies. 

The stock is upgraded to Neutral from Sell. Target price rises to $32.20 from $28.26.

WHITEHAVEN COAL LIMITED ((WHC)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0

Whitehaven Coal’s Q1 FY25 showed robust coal production, according to Goldman Sachs, with run-of-mine (ROM) output 10% above estimates, strong metallurgical and thermal price realisations, and unit costs near the low end of guidance at $145/t.

Production guidance remains unchanged, but higher Queensland production estimates and debt reduction initiatives provide a favourable outlook, in the analyst’s opinion.

Goldman upgrades Whitehaven to Buy from Neutral, and sets a price target of $7.90, a rise of 23%. The Buy rating is based on attractive free cash flow (FCF) potential and sustained demand for metallurgical coal, explains the broker.

WISETECH GLOBAL LIMITED ((WTC)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0

Goldman Sachs reaffirms WiseTech Global’s competitive positioning which is reinforced by its CargoWise software, poised for adoption across large freight forwarders, with ARPU expansion anticipated through new offerings like Container Transport Optimizer.

The EBITDA margin is forecasts to rise to 54% by FY26, supported by efficiency improvements.

The stock is upgraded to Buy from Neutral post the recent sell off on concerns around CEO/Founder Richard White. Target price $138 (retained).

Downgrade

BLUESCOPE STEEL LIMITED ((BSL)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

BlueScope Steel has issued a first half earnings guidance downgrade of -25% as steel spreads and inflationary costs weigh on earnings. Unfortunately, suggests Jarden, it appears operating performances have exacerbated weaker steel spreads.

North Star’s expected volume improvements have yet to offset lower-than-expected spreads, while its coatings business’s performance remains below the company’s expectations.

Whie surprisingly still experiencing steady demand in Australia, lower spreads, higher energy costs and non-cash accounting adjustments are suppressing returns, Jarden notes. No recovery has been noted across either NZ or the Asian operations.

A cost-out program is pending. Jarden remains constructive long term and confident BlueScope can respond to short-term cyclical pressures while building higher, less volatile earnings streams via a disciplined capital allocation process over time.

Target falls to $21.90 from $23.00, downgrade to Neutral from Overweight.

LYNAS RARE EARTHS LIMITED ((LYC)) Downgrade to Neutral from Buy by Goldman Sachs.B/H/S: 0/0/0

Goldman Sachs downgrades Lynas Rare Earths  to Neutral post the company’s 1Q25 update.

Lynas Rare Earths reported rare earth sales at 2.8kt and revenue at $121m, both slightly below expectations due to deferred NdPr sales and lower prices.

The broker observes Mt Weld expansion remains on schedule for completion in FY25, with a ramp-up at Kalgoorlie aligned with Mt Weld’s progress.

Management’s production guidance for FY25 NdPr is lowered to 6.8kt from 7.5kt. Goldman Sachs lowers EPS forecasts FY25-27 by up to -43%.

Target price declines -1% to $7.30. Neutral rated.

REGIS RESOURCES LIMITED ((RRL)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0

Regis Resources’ quarterly group production of 94.5koz was pre-reported and in line with Canaccord Genuity. Group costs of $2,495/oz were -5% below driven by lower costs at Tropicana. FY25 production guidance is maintained at 350-380koz at costs of $2,440-2,740/oz.

Regis noted that while guidance for McPhillamys expenditure has been updated, the project remains under review with the updated guide reflecting the cost to maintain the asset while work is undertaken to identify and evaluate an alternate location for the Tailings Storage Facility.

On incorporating the result and rolling its model forward, Canaccord’s target increases to $2.65 from $2.55 but the broker downgrades to Hold from Buy, while continuing to highlight Regis Resources’ strong free cash flow yields in FY25/26E of 10%/15%.

SANDFIRE RESOURCES LIMITED ((SFR)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0

Canaccord Genuity downgrades Sandfire Resources to Hold from Buy, while increasing the target price to $11.25 from $11.00.

First quarter results showed flat copper equivalent production quarter-on-quarter, with a 5% increase in copper output from Matsa offset by lower copper grades at Motheo.

Earnings (EBITDA) of US$121m missed the broker’s expectations due to lower revenues and higher costs.

Canaccord adjusts financial forecasts to reflect updated production and cost estimates, citing stable near-term growth as Sandfire focuses on consolidating recent expansions.

The broker sees limited upside in the near-term but anticipates potential future entry points if the stock pulls back.

SYNLAIT MILK LIMITED ((SM1)) Neutral by Jarden.B/H/S: 0/0/0

Following a period of restriction, Jarden introduces revised estimates for Synlait Milk, which include the recent FY24 results and additional equity support from existing key shareholders Bright (65.3%) and a2 Milk ((A2M)) (19.8%).

Key drivers for Jarden are lower North Island losses, modest ongoing growth from Dairyworks  and South Island improvement in Ingredients margin, growth in Foodservice and infant formula base powders.

The broker reduces its FY25 net debt forecast to NZ$231mn post recapitalisation and assuming further working capital improvement. Neutral with an NZ45c target.

SUPER RETAIL GROUP LIMITED ((SUL)) Downgrade to Underweight from Market Weight by Wilsons.B/H/S: 0/0/0

Super Retail’s AGM revealed sales growth has deteriorated since July/August, given increased “competitive intensity” in its key vertical, Supercheap Auto (39% of sales), implying near-term gross margin headwinds are building, Wilsons notes.

While Rebel sales remain positive on improved footwear and  apparel, Wilsons posits momentum will need to improve meaningfully in November/December to offset higher costs and avoid a profit margin squeeze in FY25.

Looking forward, Wilsons tempers expectations for the positive impact of loyalty programs on sales growth (given ongoing softness in Rebel) and downgrades gross margin assumptions ahead of Super Retail’s peak sales period.

Target falls to $12.90 from $16.10, downgrade to Underweight from Market Weight.

Order	Company	New Rating	Old Rating	Broker
Upgrade
1	ADAIRS LIMITED	Buy	Neutral	Canaccord Genuity
2	MICHAEL HILL INTERNATIONAL LIMITED	Buy	Buy	Jarden
3	PREMIER INVESTMENTS LIMITED	Neutral	Sell	Goldman Sachs
4	WHITEHAVEN COAL LIMITED	Buy	Neutral	Goldman Sachs
5	WISETECH GLOBAL LIMITED	Buy	Neutral	Goldman Sachs
Downgrade
6	BLUESCOPE STEEL LIMITED	Neutral	Buy	Jarden
7	LYNAS RARE EARTHS LIMITED	Neutral	Buy	Goldman Sachs
8	REGIS RESOURCES LIMITED	Neutral	Buy	Canaccord Genuity
9	SANDFIRE RESOURCES LIMITED	Neutral	Buy	Canaccord Genuity
10	SUPER RETAIL GROUP LIMITED	Sell	Neutral	Wilsons
11	SYNLAIT MILK LIMITED	Neutral	Buy	Jarden

Price Target Changes (Post Thursday Last Week)

Company		Last Price	Broker	New Target	Old Target	Change
29M	29Metals	$0.42	Jarden	0.30	0.33	-9.09%
ADH	Adairs	$2.66	Canaccord Genuity	2.80	1.92	45.83%
			Wilsons	2.40	1.95	23.08%
BLX	Beacon Lighting	$2.93	Jarden	3.00	2.70	11.11%
BSA	BSA	$1.04	Canaccord Genuity	1.75	1.62	8.02%
BSL	BlueScope Steel	$20.31	Goldman Sachs	25.10	28.20	-10.99%
			Jarden	21.90	23.00	-4.78%
BXB	Brambles	$18.36	Goldman Sachs	16.30	14.45	12.80%
CAR	CAR Group	$37.78	Goldman Sachs	44.50	40.90	8.80%
CMM	Capricorn Metals	$6.31	Goldman Sachs	6.15	5.55	10.81%
			Jarden	7.03	6.62	6.19%
CRD	Conrad Asia Energy	$1.08	Canaccord Genuity	2.17	1.92	13.02%
CUV	Clinuvel Pharmaceuticals	$14.20	Moelis	23.00	22.05	4.31%
CXO	Core Lithium	$0.11	Jarden	0.07	0.08	-12.50%
DTL	Data#3	$7.33	Goldman Sachs	8.25	8.15	1.23%
EVN	Evolution Mining	$5.24	Jarden	3.54	3.25	8.92%
FBU	Fletcher Building	$2.72	Goldman Sachs	2.75	3.00	-8.33%
FEX	Fenix Resources	$0.27	Petra Capital	0.42	0.44	-4.55%
FFM	FireFly Metals	$1.28	Canaccord Genuity	1.95	1.40	39.29%
FMG	Fortescue	$19.17	Goldman Sachs	15.40	15.50	-0.65%
GOR	Gold Road Resources	$2.00	Goldman Sachs	2.25	2.05	9.76%
IEL	IDP Education	$13.93	Goldman Sachs	19.00	19.85	-4.28%
IFL	Insignia Financial	$3.31	Jarden	3.25	3.30	-1.52%
IGO	IGO Ltd	$5.25	Goldman Sachs	6.20	6.40	-3.13%
ILU	Iluka Resources	$5.87	Goldman Sachs	7.70	9.00	-14.44%
INR	ioneer	$0.29	Canaccord Genuity	0.40	0.35	14.29%
JHX	James Hardie Industries	$48.86	Goldman Sachs	55.00	55.85	-1.52%
KAR	Karoon Energy	$1.39	Goldman Sachs	2.15	2.03	5.91%
			Jarden	2.05	2.10	-2.38%
			Jarden	2.15	2.10	2.38%
LYC	Lynas Rare Earths	$7.60	Goldman Sachs	7.30	7.00	4.29%
MAH	Macmahon	$0.38	Petra Capital	0.43	0.38	13.16%
MGH	Maas Group	$4.70	Wilsons	5.66	5.59	1.25%
NST	Northern Star Resources	$17.73	Canaccord Genuity	21.95	22.05	-0.45%
			Goldman Sachs	16.60	13.70	21.17%
			Jarden	13.10	12.30	6.50%
NWS	News Corp	$44.37	Goldman Sachs	52.00	48.90	6.34%
PDN	Paladin Energy	$10.20	Canaccord Genuity	16.30	16.50	-1.21%
PMV	Premier Investments	$33.75	Goldman Sachs	32.20	26.00	23.85%
			Petra Capital	33.75	34.25	-1.46%
PNI	Pinnacle Investment Management	$20.13	Wilsons	20.50	19.70	4.06%
PPS	Praemium	$0.68	Canaccord Genuity	0.95	0.85	11.76%
PXA	Pexa Group	$13.61	Goldman Sachs	16.20	15.70	3.18%
PYC	PYC Therapeutics	$0.19	Canaccord Genuity	0.24	0.22	9.09%
REA	REA Group	$226.92	Goldman Sachs	245.00	223.00	9.87%
REH	Reece	$22.81	Goldman Sachs	23.10	23.70	-2.53%
RMD	ResMed	$36.92	Wilsons	42.18	40.25	4.80%
RMS	Ramelius Resources	$2.39	Canaccord Genuity	3.25	3.20	1.56%
RRL	Regis Resources	$2.71	Canaccord Genuity	2.65	2.55	3.92%
			Goldman Sachs	2.05	1.85	10.81%
RSG	Resolute Mining	$0.82	Canaccord Genuity	1.75	1.85	-5.41%
RWC	Reliance Worldwide	$5.21	Goldman Sachs	5.93	5.35	10.84%
SDR	SiteMinder	$6.63	Goldman Sachs	6.10	5.70	7.02%
SDV	SciDev	$0.60	Canaccord Genuity	0.74	0.68	8.82%
SEK	Seek	$24.94	Goldman Sachs	21.50	19.50	10.26%
SFR	Sandfire Resources	$10.37	Canaccord Genuity	11.25	11.00	2.27%
			Jarden	9.20	8.80	4.55%
STN	Saturn Metals	$0.28	Petra Capital	0.79	0.77	2.60%
STX	Strike Energy	$0.22	Wilsons	0.31	0.33	-6.06%
SUL	Super Retail	$14.54	Goldman Sachs	17.60	18.60	-5.38%
			Jarden	16.60	17.30	-4.05%
			Wilsons	12.90	16.10	-19.88%
SYA	Sayona Mining	$0.03	Canaccord Genuity	0.05	0.05	-10.00%
TCL	Transurban Group	$12.71	Jarden	12.30	12.40	-0.81%
TPW	Temple & Webster	$11.55	Petra Capital	13.00	13.10	-0.76%
VEA	Viva Energy	$2.63	Goldman Sachs	3.30	3.50	-5.71%
WHC	Whitehaven Coal	$6.81	Goldman Sachs	7.90	6.80	16.18%
WOR	Worley	$14.00	Goldman Sachs	18.00	17.75	1.41%
WOW	Woolworths Group	$29.96	Goldman Sachs	36.20	38.90	-6.94%
XRO	Xero	$149.50	Jarden	151.00	144.00	4.86%
Company		Last Price	Broker	New Target	Old Target	Change

More Highlights

ACE    ACUSENSUS LIMITED

Transportation & Logistics Overnight Price: $0.94

Canaccord Genuity rates ((ACE)) as Buy (1)

Canaccord Genuity highlights Acusensus reported “strong” 1Q25 revenue of $14m, up 17% year-on-year and 10% quarter-on-quarter, tracking ahead of expectations for FY25 revenue growth of 14% to $57m.

The company’s revenue growth is driven by long-duration government contracts, the broker explains, with no contract churn and high cross-sell success.

The broker nominates as the domestic highlight for the quarter a $9.4m, 3-year contract with the WA government, which will add $3m per annum in incremental revenue starting in 3Q25.

Internationally, the US business achieved two new long-term contracts and a UK pilot program is underway. The broker maintains a Buy rating and has kept the price target unchanged at $1.30. No material changes were made to financial forecasts.

This report was published on October 23, 2024.

Target price is $1.30 Current Price is $0.94 Difference: $0.355
If ACE meets the Canaccord Genuity target it will return approximately 38% (excluding dividends, fees and charges).
The company’s fiscal year ends in July.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 1.40 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 67.50.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of minus 0.90 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 105.00.

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

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences Overnight Price: $0.59

Canaccord Genuity rates ((ARX)) as Buy (1)

Aroa Biosurgery reported its 2Q25 result in line with Canaccord Genuity’s expectations. Myriad sales appear to be progressing well with the combination of a maturing salesforce, focus on trauma/higher value procedures and commitment to generating validating
clinical data beginning to play out.

Delays to TELA Bio’s inventory work-through will likely be behind us, the broker suggests, and while 2Q was relatively weak on some one-off impacts, the longer-term structural growth story continues to impress with 2024 guidance of 27-31% growth maintained.

Guidance to a maiden profit in FY25 is maintained, with Canaccord expecting operating leverage and scale to come through in FY26. Buy and $1.00 target retained.

This report was published on October 24, 2024.

Target price is $1.00 Current Price is $0.59 Difference: $0.405
If ARX meets the Canaccord Genuity target it will return approximately 68% (excluding dividends, fees and charges).
The company’s fiscal year ends in March.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 0.37 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 161.68.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 1.93 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 30.80.

This company reports in NZD. 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

BSA    BSA LIMITED

Industrial Sector Contractors & Engineers Overnight Price: $1.02

Canaccord Genuity rates ((BSA)) as Buy (1)

BSA reported a strong 1Q25 result, Canaccord Genuity suggests, with underlying earnings up 48% year on year and up 3% on the prior quarter, and guidance provided for FY25. As a result, the broker has lifted FY25 earnings forecasts.

BSA also recently announced it would team with UGL to tender for the upcoming NBN Field Services contract, which will combine the complementary capabilities of the two groups, both currently providers to NBN.

Current estimated timelines indicate the NBN Field Services contract will not commence before September 2025 and therefore this tender process is not expected to materially impact BSA’s FY25 performance.

Canaccord notes BSA continues to position itself for future opportunities in the electric vehicle market. Target rises to $1.75 from $1.62, Buy retained.

This report was published on October 25, 2024.

Target price is $1.75 Current Price is $1.02 Difference: $0.73
If BSA meets the Canaccord Genuity target it will return approximately 72% (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 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 5.26.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 21.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 4.81.

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

CIP    CENTURIA INDUSTRIAL REIT

REITs Overnight Price: $3.06

Moelis rates ((CIP)) as Buy (1)

Moelis highlights Centuria Industrial REIT reported strong re-leasing spreads of 54% on recent agreements, underscoring the resilience of its infill industrial assets.

The REIT experienced 97.2% occupancy with a weighted average lease expiry of 7.5 years at the 1Q25 quarterly update.

Moelis expects continued growth through three development projects slated for FY25 and Centuria divested two properties at a 5% premium to book value, further supporting its asset valuation.

No changes to the analyst’s forecasts. Buy rated with $3.72 target price.

This report was published on October 29, 2024.

Target price is $3.72 Current Price is $3.06 Difference: $0.66
If CIP meets the Moelis target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $3.51, suggesting upside of 14.7%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 16.20 cents and EPS of 17.60 cents.
At the last closing share price the estimated dividend yield is 5.29%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 17.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 17.7, implying annual growth of 133.5%.
Current consensus DPS estimate is 16.2, implying a prospective dividend yield of 5.3%.
Current consensus EPS estimate suggests the PER is 17.3.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 16.50 cents and EPS of 18.10 cents.
At the last closing share price the estimated dividend yield is 5.39%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 16.91.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.1, implying annual growth of 2.3%.
Current consensus DPS estimate is 16.5, implying a prospective dividend yield of 5.4%.
Current consensus EPS estimate suggests the PER is 16.9.

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

GOZ    GROWTHPOINT PROPERTIES AUSTRALIA

Infra & Property Developers Overnight Price: $2.63

Moelis rates ((GOZ)) as Buy (1)

Growthpoint Properties Australia reported a “solid” quarterly update reflecting approximately 96,000 sqm of completed leasing across the portfolio, Moelis notes.

The portfolio has a weighted average lease expiry of 5.8 years, boosted by a key tenant’s exercise of a five-year option.

Despite minor occupancy declines in the office segment, demand in Brisbane remains robust, the broker observes, and recent asset sales and capital release initiatives have reduced gearing to 37.9% from 41.7%.

Management retains FY25 guidance. Buy. Target price $3.32.

This report was published on October 29, 2024.

Target price is $3.32 Current Price is $2.63 Difference: $0.69
If GOZ meets the Moelis target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $2.65, suggesting upside of 0.8%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 20.30 cents and EPS of 22.50 cents.
At the last closing share price the estimated dividend yield is 7.72%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.8, implying annual growth of N/A.
Current consensus DPS estimate is 19.3, implying a prospective dividend yield of 7.3%.
Current consensus EPS estimate suggests the PER is 13.3.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 18.50 cents and EPS of 23.70 cents.
At the last closing share price the estimated dividend yield is 7.03%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.10.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.4, implying annual growth of 3.0%.
Current consensus DPS estimate is 18.7, implying a prospective dividend yield of 7.1%.
Current consensus EPS estimate suggests the PER is 12.9.

Market Sentiment: 0.7
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: $13.93

Goldman Sachs rates ((IEL)) as Buy (1)

Goldman Sachs assesses the revised regulatory constraints impacting the international student market, notably in Canada and Australia for IDP Education.

The company’s recent entry into China’s IELTS testing market presents a growth opportunity, with breakeven expected at around 15% market share, the broker highlights.

Goldman Sachs’ FY25 earnings forecast assumes a -14% decline in student placement volumes, aligning with sector headwinds, but potential recovery is foreseen from FY26 as regulatory impacts stabilise.

EPS forecasts by the analyst fall by -1% in FY25 and -6% in FY26. Buy rating unchanged. Target price slips -4% to $19.

This report was published on October 30, 2024.

Target price is $19.00 Current Price is $13.93 Difference: $5.07
If IEL meets the Goldman Sachs target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $18.04, suggesting upside of 29.5%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 28.00 cents and EPS of 47.00 cents.
At the last closing share price the estimated dividend yield is 2.01%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 29.64.

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 2.5%.
Current consensus EPS estimate suggests the PER is 29.4.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 33.00 cents and EPS of 55.00 cents.
At the last closing share price the estimated dividend yield is 2.37%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 25.33.

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 2.9%.
Current consensus EPS estimate suggests the PER is 26.1.

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

KLS    KELSIAN GROUP LIMITED

Transportation & Logistics Overnight Price: $3.92

Canaccord Genuity rates ((KLS)) as Buy (1)

Canaccord Genuity retains a Buy rating for Kelsian with an unchanged target price of $6.10, following the company’s AGM where EBITDA guidance was reiterated at $283-295m.

The broker notes a review of capital management, with plans to optimise leverage, dividend payout, and capital returns.

Projects in Sydney and Colorado are progressing on budget, observes the analyst, and Kelsian’s Marine & Tourism division anticipates further growth from domestic tourism.

This report was published on October 30, 2024.

Target price is $6.10 Current Price is $3.92 Difference: $2.18
If KLS meets the Canaccord Genuity target it will return approximately 56% (excluding dividends, fees and charges).
Current consensus price target is $5.10, suggesting upside of 30.1%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 17.00 cents and EPS of 35.00 cents.
At the last closing share price the estimated dividend yield is 4.34%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.20.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 34.7, implying annual growth of 61.6%.
Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 4.6%.
Current consensus EPS estimate suggests the PER is 11.3.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 20.00 cents and EPS of 40.00 cents.
At the last closing share price the estimated dividend yield is 5.10%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 9.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 38.9, implying annual growth of 12.1%.
Current consensus DPS estimate is 24.0, implying a prospective dividend yield of 6.1%.
Current consensus EPS estimate suggests the PER is 10.1.

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

SDV    SCIDEV LIMITED

Industrial Sector Contractors & Engineers Overnight Price: $0.59

Canaccord Genuity rates ((SDV)) as Buy (1)

Canaccord Genuity reiterates a Buy rating on SciDev, lifting the target price to 74c from 68c, despite a slight revenue dip due to project timing in Q1.

Quarterly gross margins strengthened to 29% from around 26% in 4Q24, while earnings (EBITDA) increased by 29% quarter-on-quarter, indicating operational resilience.

The broker expects tailwinds from upcoming per-and polyfluoroalkyl substances (PFAS) contracts, with potential margin expansion from a steady project pipeline. 

This report was published on October 30, 2024.

Target price is $0.74 Current Price is $0.59 Difference: $0.145
If SDV meets the Canaccord Genuity target it will return approximately 24% (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 0.00 cents and EPS of 2.90 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 20.52.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 4.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.87.

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

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