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

This story features AUTOSPORTS GROUP LIMITED, and other companies. For more info SHARE ANALYSIS: ASG

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)

ASG   AX1   CSC   HGO   HSN   NWS   REA   SEK   WEB (2)   WOR  

ASG    AUTOSPORTS GROUP LIMITED

Automobiles & Components – Overnight Price: $1.93

Moelis rates ((ASG)) as Hold (3) –

Autosports Group announced 1H25 guidance at the AGM, with underlying pre-tax profit down -49% on the previous corresponding period and below Moelis’ forecast by -36%.

The broker observes the company’s pursuit of maintaining constant revenues has come at a “significant cost to new vehicle gross profits.”

Today’s update highlights new vehicle supply has improved while demand has plateaued, leading to oversupply and the need to discount prices to clear inventory. First-half margins are expected to decline to 17.7%.

Moelis has cut EPS forecasts by -26% in FY25 and -6% in FY26, with the target price slipping to $2. The Hold rating remains unchanged.

This report was published on November 24, 2024.

Target price is $2.00 Current Price is $1.93 Difference: $0.07
If ASG meets the Moelis target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $2.33, suggesting upside of 20.9%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 11.70 cents and EPS of 21.40 cents.
At the last closing share price the estimated dividend yield is 6.06%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 9.02.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 23.1, implying annual growth of -23.7%.
Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 7.4%.
Current consensus EPS estimate suggests the PER is 8.4.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 12.70 cents and EPS of 23.20 cents.
At the last closing share price the estimated dividend yield is 6.58%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.32.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.0, implying annual growth of 21.2%.
Current consensus DPS estimate is 17.5, implying a prospective dividend yield of 9.1%.
Current consensus EPS estimate suggests the PER is 6.9.

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

AX1    ACCENT GROUP LIMITED

Apparel & Footwear – Overnight Price: $2.28

Jarden rates ((AX1)) as Buy (1) –

Jarden comments Accent Group reported a disappointing trading update at the AGM, with group sales up 6.8% year-on-year for the first 20 weeks to October 17, compared to the consensus estimate of 8% annual growth for 1H25.

Gross margins were down -70bps due to increased promotional activity, compared to consensus expectations of a decline of -47bps in 1H25.

Management confirmed 40 new store openings in 1H25, on track for at least 50 in FY25, while the cost of doing business as a percentage of sales was in line with consensus.

The target price rises to $2.35 from $2.29. The Buy rating is unchanged.

This report was published on November 21, 2024.

Target price is $2.35 Current Price is $2.28 Difference: $0.07
If AX1 meets the Jarden target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $2.57, suggesting upside of 12.9%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 EPS of 14.40 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 13.9, implying annual growth of 31.0%.
Current consensus DPS estimate is 13.5, implying a prospective dividend yield of 5.9%.
Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY26:

Jarden forecasts a full year FY26 EPS of 16.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.25.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 16.3, implying annual growth of 17.3%.
Current consensus DPS estimate is 15.3, implying a prospective dividend yield of 6.7%.
Current consensus EPS estimate suggests the PER is 14.0.

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

CSC    CAPSTONE COPPER CORP.

Copper – Overnight Price: $11.26

Wilsons rates ((CSC)) as Initiation of coverage with Overweight (1) –

Wilsons initiates coverage on multi-asset, high-growth copper producer Capstone Copper with an Overweight rating and a $14.50 target. The company has four producing assets in the Americas (US, Mexico, and Chile), along with a key growth project in Chile.

The company, also listed in Canada, ranks around the 30th largest copper producer globally but has the potential to rise into the top 15 within five years, according to the broker.

The analysts highlight the company’s strategic advantage as its massive resource base, supported by near-term operating cash flow and a strong balance sheet to evolve into a larger and lower-cost major producer.

Production guidance for 2024 is 189kt of copper, matching the broker’s expectations but below consensus, reflecting management’s conservative estimates.

This report was published on November 25, 2024.

Target price is $14.50 Current Price is $11.26 Difference: $3.24
If CSC meets the Wilsons target it will return approximately 29% (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 5.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 212.45.

Forecast for FY25:

Wilsons forecasts a full year FY25 dividend of 0.00 cents and EPS of 23.80 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 47.31.

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

HGO    HILLGROVE RESOURCES LIMITED

Copper – Overnight Price: $0.06

Moelis rates ((HGO)) as Buy (1) –

Moelis visited Hillgrove Resources’ Kanmantoo underground mine in South Australia following the restart of idled assets.

The broker notes the mine restart is now complete, and the transition to underground mining has been successful, with management now focusing on increasing resources and reserves beyond current levels.

The target is 3-4 years of reserve life and ensuring ongoing replacement of depleted tonnes.

The Buy rating with an 8c target price is retained.

This report was published on November 21, 2024.

Target price is $0.08 Current Price is $0.06 Difference: $0.024
If HGO meets the Moelis target it will return approximately 43% (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 0.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 28.00.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 0.00 cents and EPS of 1.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 4.67.

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

HSN    HANSEN TECHNOLOGIES LIMITED

IT & Support – Overnight Price: $5.57

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

Hansen Technologies brought forward the expected earnings profitability in Powercloud to 4Q25 from 2H2025. Goldman Sachs notes headcount has declined to 140 from 390, generating -$27m in annual savings, or around 50% of Powercloud’s 2H24 actual cost base.

Management guided to organic revenue growth of 5%-7% for FY25, with a 2H25 earnings skew due to the timing of license fees and the shift to profitability.

No change to the broker’s earnings forecasts. Buy rating with a $5.10 target price retained.

This report was published on November 21, 2024.

Target price is $5.10 Current Price is $5.57 Difference: minus $0.47 (current price is over target).
If HSN meets the Goldman Sachs target it will return approximately minus 8% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $6.57, suggesting upside of 17.9%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 11.00 cents and EPS of 20.00 cents.
At the last closing share price the estimated dividend yield is 1.97%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 27.85.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 18.0, implying annual growth of 73.6%.
Current consensus DPS estimate is 10.3, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 30.9.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 20.00 cents and EPS of 29.00 cents.
At the last closing share price the estimated dividend yield is 3.59%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 27.0, implying annual growth of 50.0%.
Current consensus DPS estimate is 10.7, implying a prospective dividend yield of 1.9%.
Current consensus EPS estimate suggests the PER is 20.6.

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

NWS    NEWS CORPORATION

Print, Radio & TV – Overnight Price: $49.35

Jarden rates ((NWS)) as Overweight (2) –

Jarden raises the News Corp target price to $49.80 from $45.80, driven by an increase in the REA Group ((REA)) valuation to $205 from $180 and the company’s 1Q25 result.

The broker notes 1Q25 earnings rose 14% for News Corp, slightly exceeding both analyst and consensus expectations.

Book publishing earnings increased 21%, subscription video was 6% ahead of expectations, news media outperformed by US$12m, and overheads were reduced by -17%.

Jarden highlights the Dow Jones result as notably “impressive” given the weak advertising revenue environment.

This report was published on November 21, 2024.

Target price is $49.80 Current Price is $49.35 Difference: $0.45
If NWS meets the Jarden target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $48.77, suggesting downside of -1.2%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 30.16 cents and EPS of 119.87 cents.
At the last closing share price the estimated dividend yield is 0.61%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 41.17.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 122.5, implying annual growth of N/A.
Current consensus DPS estimate is 33.3, implying a prospective dividend yield of 0.7%.
Current consensus EPS estimate suggests the PER is 40.3.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 30.16 cents and EPS of 136.16 cents.
At the last closing share price the estimated dividend yield is 0.61%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 36.24.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 151.2, implying annual growth of 23.4%.
Current consensus DPS estimate is 43.9, implying a prospective dividend yield of 0.9%.
Current consensus EPS estimate suggests the PER is 32.6.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

REA    REA GROUP LIMITED

Real Estate – Overnight Price: $248.37

Jarden rates ((REA)) as Underweight (4) –

Jarden adopts a more positive view on agent spend for REA Group and forecasts its share of agent spending versus Domain Holdings ((DHG)) to rise to 81% by FY28, compared to 79% in FY24.

The broker raises earnings forecasts by 0.6% for FY26 and 1.4% for FY27, with more substantial longer-term upgrades, including a 4.5% increase in the earnings growth forecast for FY30.

The broker retains an Underweight rating on REA Group with a higher target price of $205.

This report was published on November 21, 2024.

Target price is $205.00 Current Price is $248.37 Difference: minus $43.37 (current price is over target).
If REA meets the Jarden target it will return approximately minus 17% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $240.86, suggesting downside of -3.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 228.20 cents and EPS of 437.70 cents.
At the last closing share price the estimated dividend yield is 0.92%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 56.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 433.5, implying annual growth of 89.1%.
Current consensus DPS estimate is 239.2, implying a prospective dividend yield of 1.0%.
Current consensus EPS estimate suggests the PER is 57.3.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 265.50 cents and EPS of 498.50 cents.
At the last closing share price the estimated dividend yield is 1.07%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 49.82.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 511.5, implying annual growth of 18.0%.
Current consensus DPS estimate is 283.4, implying a prospective dividend yield of 1.1%.
Current consensus EPS estimate suggests the PER is 48.6.

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

SEK    SEEK LIMITED

Jobs & Skilled Labour Services – Overnight Price: $26.55

Jarden rates ((SEK)) as Buy (1) –

Jarden notes the AGM trading update from Seek showed no change to guidance, though the expenditure range has tightened to -$760m-$790m from -$740m-$810m.

The broker observes Australian volumes were slightly higher than expected year-to-date, while Asia has been “mixed” and below expectations.

Jarden makes slight adjustments to earnings forecasts.

Seek remains the broker’s top classifieds pick, with the target price raised to $28.50 from $28.

This report was published on November 21, 2024.

Target price is $28.50 Current Price is $26.55 Difference: $1.95
If SEK meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $27.44, suggesting upside of 3.4%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 29.80 cents and EPS of 45.90 cents.
At the last closing share price the estimated dividend yield is 1.12%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 57.84.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 40.2, implying annual growth of N/A.
Current consensus DPS estimate is 34.5, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 66.0.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 40.90 cents and EPS of 62.90 cents.
At the last closing share price the estimated dividend yield is 1.54%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 42.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 59.2, implying annual growth of 47.3%.
Current consensus DPS estimate is 48.0, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 44.8.

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

WEB    WEB TRAVEL GROUP LIMITED

Travel, Leisure & Tourism – Overnight Price: $4.25

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

Goldman Sachs notes Web Travel’s analyst call on Nov 21 to explain the company’s financial restatements following the adoption of AASB9 versus the previous AASB137.

Management indicated the issue centred on the methodology used to estimate supplier billing error rates, resulting in an increase in revenue and a decrease in payables.

The company is now expected to retrospectively estimate supplier billings that have been cancelled or expired on a six-month rolling basis.

The Buy rating with a $6.70 target price is maintained. No changes to earnings forecasts. 1H25 results are due on Nov 27.

This report was published on November 21, 2024.

Target price is $6.70 Current Price is $4.25 Difference: $2.45
If WEB meets the Goldman Sachs target it will return approximately 58% (excluding dividends, fees and charges).
Current consensus price target is $5.26, suggesting upside of 23.8%(ex-dividends)
The company’s fiscal year ends in March.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 EPS of 19.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 22.37.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 5.4%.
Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 21.4.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 EPS of 27.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.74.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.7, implying annual growth of 44.2%.
Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 14.8.

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

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

Wilsons views the change in accounting policy for Web Travel as “much ado about nothing,” almost.

The broker notes the change arises from the flow of funds, accrual timing, and invoicing of hotel bookings. The changes are non-cash and non-material, according to the analyst.

With the upcoming 1H25 result on Nov 26, Wilsons’ forecasts remain unchanged.

Wilsons retains an Overweight rating and a $5.17 target price.

This report was published on November 21, 2024.

Target price is $5.17 Current Price is $4.25 Difference: $0.92
If WEB meets the Wilsons target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $5.26, suggesting upside of 23.8%(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 16.80 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 25.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 19.9, implying annual growth of 5.4%.
Current consensus DPS estimate is 1.0, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 21.4.

Forecast for FY26:

Wilsons forecasts a full year FY26 dividend of 0.00 cents and EPS of 22.50 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.89.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 28.7, implying annual growth of 44.2%.
Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.6%.
Current consensus EPS estimate suggests the PER is 14.8.

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

WOR    WORLEY LIMITED

Energy Sector Contracting – Overnight Price: $14.16

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

Worley reiterated double-digit earnings growth and expects an underlying earnings margin of 8%-8.5% in FY25, compared to Goldman Sachs’ forecasts of 10% growth in FY25 earnings and an ex-procurement margin of 8.4%.

Management confirmed 2H25 is expected to be stronger than 1H25. The company reported 1,048 sustainability project wins in 1Q25, up 25% on the previous year and also up 25% on 4Q24.

Goldman Sachs notes cancellations are affecting Worley’s backlog, though the wins are compensating.

No change to the Buy rating and $18 target price.

This report was published on November 21, 2024.

Target price is $18.00 Current Price is $14.16 Difference: $3.84
If WOR meets the Goldman Sachs target it will return approximately 27% (excluding dividends, fees and charges).
Current consensus price target is $18.26, suggesting upside of 29.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 53.00 cents and EPS of 77.00 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 18.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.5, implying annual growth of 50.5%.
Current consensus DPS estimate is 51.4, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 16.4.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 66.00 cents and EPS of 99.00 cents.
At the last closing share price the estimated dividend yield is 4.66%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.30.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 105.8, implying annual growth of 22.3%.
Current consensus DPS estimate is 53.8, implying a prospective dividend yield of 3.8%.
Current consensus EPS estimate suggests the PER is 13.4.

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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