In Case You Missed It – BC Extra Upgrades & Downgrades – 29-11-24

This story features EMECO HOLDINGS LIMITED, and other companies. For more info SHARE ANALYSIS: EHL

Broker Rating Changes (Post Thursday Last Week)

Upgrade

EMECO HOLDINGS LIMITED ((EHL)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden upgrades Emeco Holdings to Overweight from Neutral following an AGM update where initial FY25 earnings (EBITDA) guidance of at least $300m was provided.

Management indicated a similar earnings skew to FY24 in FY25, with a slight improvement anticipated in 2H25 utilisation.

The broker raises EPS estimates for FY25-27 by 17%, 7%, and 7%, respectively, supported by strong demand for surface equipment and constrained capital intensity.

Jarden increases the target price to $1.00 from $0.85, citing enhanced earnings visibility and balance sheet strength.

HARVEY NORMAN HOLDINGS LIMITED ((HVN)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden has recalibrated its views on retailers.

The broker upgrades Harvey Norman to Overweight from Neutral to reflect the replacement cycle, a more optimistic outlook for the consumer in 2025 with short-term volatility and a lot relying on Cyber week.

Target price moves to $4.90 with the company’s upcoming AGM on Nov 27.

JB HI-FI LIMITED ((JBH)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0

Jarden has recalibrated its views on retailers.

The broker upgrades JB Hi-Fi to Neutral from Underweight, reflecting the replacement cycle and a more optimistic outlook for consumers in 2025, despite short-term volatility and the significance of the upcoming Cyber Week.

Jarden believes JB Hi-Fi offers “quality growth” and raises the target price to $84 from $68.

LOVISA HOLDINGS LIMITED ((LOV)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Following a trading update for the first 20 weeks of FY25, Jarden lowers its forecasts for Lovisa Holdings to reflect a more conservative store rollout.

The target price falls to $29.03 from $30.59, and the broker upgrades the rating to Overweight from Neutral, noting execution risk is now largely priced into the current share price. A strong long-term rollout opportunity is still considered viable.

Net new store rollouts totaled 27, with closures reduced to 13, consistent with FY23 levels.

The trading update showed like-for-like sales growth slowed to 1.0% year-on-year, below the 2.5% consensus, while total sales growth of 10% lagged the 13.2% forecast, note the analysts.

SUPER RETAIL GROUP LIMITED ((SUL)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden has recalibrated its views on retailers.

The broker upgrades Super Retail to Overweight from Neutral with a $16.80 target price.

Jarden has a more optimistic view on the consumer for 2025 with Super Retail expected to gain market share.

Downgrade

GENTRACK GROUP LIMITED ((GTK)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0

Following FY24 results, Wilsons raises its target for Gentrack Group by $1.00 to $12.50 and downgrades to Market Weight from Overweight on valuation.

The broker highlights ongoing momentum for both Energy and Water (B2B and B2C), despite market concerns heading into the result around non-recurring revenue (NRR) not replenishing.

Management’s medium-term guidance for ongoing growth and operating leverage remains.

The analysts understand the deal pipeline is deep and broad across both Energy and Water markets, with management seeking potential contract wins in both UK B2B Water (mid-sized opportunity) and in UK B2C Water.

WESFARMERS LIMITED ((WES)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden has recalibrated its views on retailers.

The broker downgrades Wesfarmers to Underweight from Neutral with risks to the earnings outlook.

Target price $61.

Price Target Changes (Post Thursday Last Week)

More Highlights

ABB    AUSSIE BROADBAND LIMITED

Telecommunication – Overnight Price: $3.58

Jarden rates ((ABB)) as Initiation of coverage with Overweight (2) –

Jarden  initiates coverage on Aussie Broadband with a $4.00 target and Overweight rating, supported by proprietary infrastructure, strong capital management, and premium positioning.

Within the industry, the analysts like challenger telcos as they continue to take market share from the incumbent operators.

The company’s premium status (and pricing) in consumer fixed connectivity is underpinned by its proprietary software, owned fibre network, and Tier-1 voice infrastructure, explain the analysts.

Key drivers include NBN Co’s Fibre Connect program upgrading approximately 3.1m subscribers to higher-speed tiers and NBN Co’s new pricing model encouraging higher-speed adoption, explains Jarden.

The analysts also expects increased service and installation orders from small businesses and new building activity.

The broker forecasts an 18% dividend compound annual growth rate (CAGR) through FY33.

This report was published on November 25, 2024.

Target price is $4.00 Current Price is $3.75 Difference: $0.25
If ABB meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $4.24, suggesting upside of 13.1%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 8.00 cents and EPS of 12.70 cents.
At the last closing share price the estimated dividend yield is 2.13%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 29.53.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.3, implying annual growth of 57.1%.
Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.5%.
Current consensus EPS estimate suggests the PER is 24.5.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 11.00 cents and EPS of 17.50 cents.
At the last closing share price the estimated dividend yield is 2.93%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 21.43.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 20.9, implying annual growth of 36.6%.
Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 1.3%.
Current consensus EPS estimate suggests the PER is 17.9.

Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

ANG    AUSTIN ENGINEERING LIMITED

Mining Sector Contracting – Overnight Price: $0.54

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

Petra Capital reiterates a Buy rating and a target price of 60c for Austin Engineering, noting the recent share price decline presents a buying opportunity.

The broker expects the company to benefit from resilient customer demand, market share gains, and profit margins exceeding the FY26 consensus forecast.

Management reaffirmed FY25 guidance for revenue of $350m and earnings (EBIT) of $50m, anticipating 1H:2H revenue and EBIT splits of 45:55 and 40:60, respectively.

This report was published on November 21, 2024.

Target price is $0.60 Current Price is $0.55 Difference: $0.055
If ANG meets the Petra Capital target it will return approximately 10% (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 2.50 cents and EPS of 6.00 cents.
At the last closing share price the estimated dividend yield is 4.59%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 9.08.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 3.50 cents and EPS of 6.90 cents.
At the last closing share price the estimated dividend yield is 6.42%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.90.

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 $10.64 Difference: $3.86
If CSC meets the Wilsons target it will return approximately 36% (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 200.75.

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 44.71.

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

EGH    EUREKA GROUP HOLDINGS LIMITED

Aged Care & Seniors – Overnight Price: $0.59

Moelis rates ((EGH)) as Initiation of coverage with Buy (1) –

Moelis initiates coverage on Eureka Group with a Buy rating and a 70c target price.

The broker highlights the group is the largest seniors’ rental village operator in an undersupplied market, expected to grow at a 3% p.a. compound rate over the next decade.

Eureka recently raised equity, strengthening the balance sheet and reducing gearing to 8% from 37%. Moelis believes the funds deployed will be EPS accretive.

The analyst forecasts EPS growth of 12% p.a. for the next three years. Eureka trades at a 16% premium to NTA.

This report was published on November 25, 2024.

Target price is $0.70 Current Price is $0.58 Difference: $0.115
If EGH meets the Moelis target it will return approximately 20% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 1.50 cents and EPS of 3.30 cents.
At the last closing share price the estimated dividend yield is 2.56%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 17.73.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 1.80 cents and EPS of 3.80 cents.
At the last closing share price the estimated dividend yield is 3.08%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.39.

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

EHL    EMECO HOLDINGS LIMITED

Mining Sector Contracting – Overnight Price: $0.87

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

Canaccord Genuity maintains its Buy rating for Emeco Holdings and raises the target price to $1.07 from $1.05, reflecting improvements in operational performance and return on capital.

FY25 earnings (EBITDA) guidance exceeds $300m, supported by robust gold and bulk commodity production, offsetting weaker performance in lithium and nickel, explains the broker.

The company is targeting a 20% return on capital by FY26, aided by a -$60m growth capex investment in FY24.

Operational updates indicate to the broker improved underground rental utilisation and confidence in redeploying surface rental equipment in 2H25. Management also reiterated depreciation and capex guidance.

Canaccord highlights strong free cash flow generation and a deleveraging balance sheet, with the overall valuation supported by an attractive FY25 valuation multiple. 

This report was published on November 21, 2024.

Target price is $1.07 Current Price is $0.88 Difference: $0.195
If EHL meets the Canaccord Genuity target it will return approximately 22% (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 14.80 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.91.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 3.20 cents and EPS of 15.80 cents.
At the last closing share price the estimated dividend yield is 3.66%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.54.

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

GQG    GQG PARTNERS INC

Wealth Management & Investments – Overnight Price: $2.24

Jarden rates ((GQG)) as Initiation of coverage with Buy (1) –

Jarden initiates coverage of GQG Partners with a Buy rating and a $3.30 target price.

GQG has achieved over 40% compound annual growth in funds under administration over the past five years, driven by strong net inflows. Net profit after tax has compounded at an average rate of over 50% during the same period.

Consensus estimates of net inflows at around 4%-5% for 2025-2026 appear both conservative and achievable.

Jarden highlights the company trades at an undemanding 9x 12-month forward price-to-earnings ratio, well below its peers, which are experiencing net outflows.

Buy rated. Target $3.30.

This report was published on November 27, 2024.

Current Price is $2.30. Target price not assessed.
Current consensus price target is $3.19, suggesting upside of 38.9%(ex-dividends)
The company’s fiscal year ends in December.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 20.36 cents and EPS of 22.02 cents.
At the last closing share price the estimated dividend yield is 8.85%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 10.45.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 22.4, implying annual growth of N/A.
Current consensus DPS estimate is 20.7, implying a prospective dividend yield of 9.0%.
Current consensus EPS estimate suggests the PER is 10.3.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 24.13 cents and EPS of 26.39 cents.
At the last closing share price the estimated dividend yield is 10.49%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.72.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 25.4, implying annual growth of 13.4%.
Current consensus DPS estimate is 23.3, implying a prospective dividend yield of 10.1%.
Current consensus EPS estimate suggests the PER is 9.1.

This company reports in USD. 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

MEK    MEEKA METALS LIMITED

Overnight Price: $0.07

Petra Capital rates ((MEK)) as Initiation of coverage with Buy (1) –

Petra Capital initiates coverage on Meeka Metals with a Buy rating and a 15c target, citing near-term production potential at the Murchison Gold Project.

The May 2024 definitive feasibility study (DFS) outlined a low-capex path to production, with a nine-year mine life and first gold targeted for the September quarter of 2025, explains the broker.

Following the acquisition of a larger ball mill, an updated DFS in December is expected to increase processing capacity by 30%, lifting production to 570koz over the mine’s life, notes the analyst.

The project is fully funded, with construction underway, including plant refurbishment and infrastructure upgrades. Pre-production capex is estimated at -$44m, and operations remain unhedged and debt-free, highlights Petra Capital.

The broker anticipates significant valuation upside from exploration and re-optimised production metrics.

This report was published on November 25, 2024.

Target price is $0.15 Current Price is $0.07 Difference: $0.078
If MEK meets the Petra Capital target it will return approximately 108% (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 0.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 36.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 3.10 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 2.32.

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

PPS    PRAEMIUM LIMITED

Wealth Management & Investments – Overnight Price: $0.66

Moelis rates ((PPS)) as Buy (1) –

Management reaffirmed progress on Praemium’s Spectrum IDPS product at the AGM, highlighting strong platform revenue growth and advancements in AI-driven efficiencies.

Moelis notes revenue margins improved by 3bps in early FY25 due to SMA repricing, and Euroz Hartleys adopted the full suite of the company’s products, transitioning $2bn in FUA over 18 months.

The broker estimates gross inflows of $250m, $600m, and $1bn for FY25-27, respectively, frrom Spectrum, noting potential upside if execution remains robust. OneVue synergies are expected to contribute $3m in annual earnings.

Moelis raises EPS forecasts by 0.3% in FY25 and 3.5% in FY26.

Buy rating retained. Target price rises to 87c from 80c.

This report was published on November 20, 2024.

Target price is $0.87 Current Price is $0.69 Difference: $0.185
If PPS meets the Moelis target it will return approximately 27% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 1.00 cents and EPS of 2.80 cents.
At the last closing share price the estimated dividend yield is 1.46%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 24.46.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 1.30 cents and EPS of 3.40 cents.
At the last closing share price the estimated dividend yield is 1.90%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 20.15.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

QAL    QUALITAS LIMITED

Wealth Management & Investments – Overnight Price: $2.60

Jarden rates ((QAL)) as Initiation of coverage with Buy (1) –

Jarden initiates coverage of Qualitas with a Buy rating and a $3.75 target price.

Qualitas is a private credit manager with approximately 80% of its funds under management invested in residential property.

Management has committed to doubling funds under management to $18bn by FY28. The broker forecasts $17.9bn, including $1.8bn in funds raised and annual fundraising of around $2.5bn over FY26-FY28.

This report was published on November 27, 2024.

Target price is $3.75 Current Price is $2.56 Difference: $1.19
If QAL meets the Jarden target it will return approximately 46% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 8.60 cents and EPS of 11.60 cents.
At the last closing share price the estimated dividend yield is 3.36%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 22.07.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 10.40 cents and EPS of 14.10 cents.
At the last closing share price the estimated dividend yield is 4.06%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 18.16.

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: $0.55

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

SciDev has secured a landmark win, according to Canaccord Genuity, with its first European Per- and Polyfluoroalkyl Substances (PFAS) treatment contract.

The $475,000 contract with Swedish Hydro Solutions involves designing, constructing, and commissioning a containerised water treatment plant for contaminated landfill leachate, observes the broker.

A successful trial could lead to expanded usage and additional contract value, highlights the analyst.

Canaccord notes significant growth potential in Europe, where 17,000 sites have confirmed PFAS contamination and 21,000 are suspected. Expansion into the US market is considered a key next step.

The broker points out SciDev’s effective and low-cost PFAS treatment technology provides a strong competitive advantage, underpinning the unchanged $0.74 target and Buy rating.

This report was published on November 20, 2024.

Target price is $0.74 Current Price is $0.60 Difference: $0.135
If SDV meets the Canaccord Genuity target it will return approximately 22% (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 20.86.

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 15.13.

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

SLC    SUPERLOOP LIMITED

Telecommunication – Overnight Price: $2.13

Jarden rates ((SLC)) as Initiation of coverage with Buy (1) –

Jarden initiates coverage on Superloop with a Buy rating and a $2.50 target, highlighting structural tailwinds including the NBN Fibre Connect program, pricing reforms, and increased small business penetration.

Within the industry, the analysts like challenger telcos as they continue to take market share from the incumbent operators.

The broker expects FY26 adjusted earnings EBITDA of $112m, 6% above guidance, driven by the Origin Energy ((ORG)) contract, which adds $19m in annualised earnings from broadband subscribers.

The analysts’ forecast Superloop will deliver a 54% EPS compound annual growth rate (CAGR) from FY25 to FY27.

The company’s residential segment is set to grow at a 14% revenue CAGR through FY33, while wholesale contracts, including Origin Energy and AGL Energy ((AGL)), underpin near-term earnings leverage, explains Jarden.

Challenges include competition from incumbents and fixed wireless access (FWA) penetration, highlights the broker.

This report was published on November 25, 2024.

Target price is $2.50 Current Price is $2.20 Difference: $0.3
If SLC meets the Jarden target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $2.15, suggesting downside of -2.3%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 733.33.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.3, 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 41.5.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 0.00 cents and EPS of 4.70 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 46.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 7.1, implying annual growth of 34.0%.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is 31.0.

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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