Australian Broker Call *Extra* Edition – Jan 15, 2025

This story features ASTRAL RESOURCES NL, and other companies. For more info SHARE ANALYSIS: AAR

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)

AAR   APE   ASX   DXB   EMR   GT1   IAG   MFG   QBE   WAF  

AAR    ASTRAL RESOURCES NL

Gold & Silver – Overnight Price: $0.14

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

Astral Resources took a 20% stake in Maximus Resources ((MXR)) and launched a takeover bid for the balance. If successful, Canaccord Genuity notes the transaction would create a company with $210m market capitalisation.

The broker comments Astral’s September study showed its Tailings storage facility, plant and waste dump were constrained by tenement footprint. 

A transaction with Maximus Resources will give adjacent tenements, offering potential to free up mine design and increase efficiency, according to the broker. The increased landholding would also offer potential upside to further optimise the Theia orebody, the broker adds.

Speculative Buy rating stays and target price is unchanged at $0.39.

This report was published on December 30, 2024.

Target price is $0.39 Current Price is $0.14 Difference: $0.255
If AAR meets the Canaccord Genuity target it will return approximately 189% (excluding dividends, fees and charges).

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

APE    EAGERS AUTOMOTIVE LIMITED

Automobiles & Components – Overnight Price: $11.82

Canaccord Genuity rates ((APE)) as Hold (3) –

Canaccord Genuity notes 2024 was a record for Australian vehicle sales, up 1.6%, but the rate of growth slowed in the second half and on a sequential basis was down -4.5% versus the first half.

The broker believes Eagers Automotive will maintain a better margin than peers but will still be impacted by industry-wide movements. The broker has a below consensus forecast for the company and is comfortable retaining it given its view there will likely be negative earnings revision in February’s result release.

On that basis, the broker has retained the Hold rating and $11 target price.

This report was published on January 8, 2025.

Target price is $11.00 Current Price is $11.82 Difference: minus $0.82 (current price is over target).
If APE meets the Canaccord Genuity target it will return approximately minus 7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $11.87, suggesting upside of 0.4%(ex-dividends)
The company’s fiscal year ends in December.

Forecast for FY24:

Canaccord Genuity forecasts a full year FY24 dividend of 60.00 cents and EPS of 96.80 cents.
At the last closing share price the estimated dividend yield is 5.08%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.21.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 92.4, implying annual growth of -16.6%.
Current consensus DPS estimate is 64.8, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 12.8.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 57.00 cents and EPS of 87.10 cents.
At the last closing share price the estimated dividend yield is 4.82%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 13.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 94.0, implying annual growth of 1.7%.
Current consensus DPS estimate is 65.2, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 12.6.

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

ASX    ASX LIMITED

Wealth Management & Investments – Overnight Price: $64.49

Goldman Sachs rates ((ASX)) as Sell (5) –

Ahead of ASX’s 1H results on February 13, Goldman Sachs has made earnings changes to reflect the company’s operational trends which it notes are positive, outside of listings.

The broker notes reset risk is low at the result but remains cautious on capex risks and its implication for free cash. The broker observes valuation is at 25.6x FY25 or 24.9x FY26 — broadly in line with global peers. 

The bropker comments key areas of focus ahead of results are divisional operating trends, expense trends, fee/pricing changes, equity investments and regulatory risk.

The target price remains unchanged at $59..5 and the rating at Sell.

This report was published on January 8, 2025.

Target price is $59.50 Current Price is $64.49 Difference: minus $4.99 (current price is over target).
If ASX 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 $63.87, suggesting downside of -1.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 217.00 cents and EPS of 256.00 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 25.19.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 255.5, implying annual growth of 4.4%.
Current consensus DPS estimate is 214.6, implying a prospective dividend yield of 3.3%.
Current consensus EPS estimate suggests the PER is 25.2.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 220.00 cents and EPS of 251.00 cents.
At the last closing share price the estimated dividend yield is 3.41%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 25.69.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 263.2, implying annual growth of 3.0%.
Current consensus DPS estimate is 220.3, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 24.5.

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

DXB    DIMERIX LIMITED

Pharmaceuticals & Biotech/Lifesciences – Overnight Price: $0.49

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

Dimerix inked its third commercial deal, out-licensing Japan rights for its drug DMX-200 for FSGS to specialty pharma Fuso for $107m plus royalties. 

FSGS stands for Focal Segmental Glomerulosclerosis (FSGS), a rare and serious kidney disease.

Petra Capital notes the deal de-risks the commercial pathway, provides non-dilutive funding, and highlights management’s ability to execute partnerships. The broker sees potential for more deals with key US and China rights yet to be licensed. 

The target price has been raised to $1.37 from $1.33, and the Buy rating stays.

This report was published on January 8, 2025.

Target price is $1.37 Current Price is $0.49 Difference: $0.875
If DXB meets the Petra Capital target it will return approximately 177% (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 1.70 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 29.12.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 3.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.00.

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

EMR    EMERALD RESOURCES NL

Gold & Silver – Overnight Price: $3.41

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

Canaccord Genuity notes Emerald Resources’ gold production from the Okvau mine in Cambodia was a record 31.9koz in the December quarter, exceeding the 25-30 per quarter guidance.

The record production was largely due to recent modifications to the oxygen plant which improved plant recoveries and was outlined in the broker’s initiation of coverage of Emerald Resources in mid-2024.

The broker is looking ahead to an updated Okvau Mineral Resource and Ore Reserve later this month where it expects potential improvements to project economics.

Buy rating stays and target price remains at $5.00.

This report was published on January 6, 2025.

Target price is $5.00 Current Price is $3.41 Difference: $1.59
If EMR meets the Canaccord Genuity target it will return approximately 47% (excluding dividends, fees and charges).

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

GT1    GREEN TECHNOLOGY METALS LIMITED

New Battery Elements – Overnight Price: $0.07

Canaccord Genuity rates ((GT1)) as Buy (1) –

GT1 received support from Export Development Canada for up to C$100m in project finance for the Seymour Lithium Project which is close to half of CA$216m highlighted in the company’s Stage 1 capex preliminary assessment in 2023.

Canaccord Genuity notes the project’s progress with drilling, Indigenous consultation, and permit approvals.

The broker considers a key deliverable for GT1 to be the Definitive Feasibility Study that will outline final capital requirements and project metrics, which it anticipates during 2025.

The Speculative Buy rating is unchanged and the target price remains at 20c.

This report was published on December 24, 2024.

Target price is $0.20 Current Price is $0.07 Difference: $0.128
If GT1 meets the Canaccord Genuity target it will return approximately 178% (excluding dividends, fees and charges).

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

IAG    INSURANCE AUSTRALIA GROUP LIMITED

Insurance – Overnight Price: $8.45

Goldman Sachs rates ((IAG)) as Neutral (3) –

Goldman Sachs has reviewed initial Jan 1 reinsurance renewals updates from Guy Carpenter and AON which has implications for Insurance Australia Group as the company renews its main catastrophe program.

According to the broker, the updates are incrementally positive for the company given Guy Carpenter flagged reductions in risk-adjusted reinsurance renewal rates for non-loss impacted property catastrophe covers of 5-15%.

Also, reinsurance appetite was estimated to be up 10-15% reflecting an increase in reinsurance capital which helped insurers purchase protection at lower rates. The broker noted casualty renewals were broadly stable but remained an area of focus.

No changes to the Neutral rating or target price.

This report was published on December 31, 2024.

Target price is $7.50 Current Price is $8.45 Difference: minus $0.95 (current price is over target).
If IAG meets the Goldman Sachs target it will return approximately minus 11% (excluding dividends, fees and charges – negative figures indicate an expected loss).
Current consensus price target is $8.59, suggesting upside of 1.7%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 31.00 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 3.67%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 41.3, implying annual growth of 10.7%.
Current consensus DPS estimate is 30.6, implying a prospective dividend yield of 3.6%.
Current consensus EPS estimate suggests the PER is 20.5.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 32.00 cents and EPS of 43.00 cents.
At the last closing share price the estimated dividend yield is 3.79%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 19.65.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 43.9, implying annual growth of 6.3%.
Current consensus DPS estimate is 32.6, implying a prospective dividend yield of 3.9%.
Current consensus EPS estimate suggests the PER is 19.2.

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

MFG    MAGELLAN FINANCIAL GROUP LIMITED

Wealth Management & Investments – Overnight Price: $10.79

Goldman Sachs rates ((MFG)) as Neutral (3) –

Ahead of Magellan Financial’s 1H25 result on February 20, Goldman Sachs is optimistic about value crystallization through capital management, earnings improvement from Magellan’s associates, and broadly stable underlying net flow. 

On the downside, the broker notes Magellan’s performance remains below benchmarks, growth is negative despite stable flows and the company requires investment to grow.

The broker will be looking at capital management strategy, fee margins, expectations on flow and new product launches, expenses and performance of associates.

No change to Neutral rating. Target price is $11.0.

This report was published on January 9, 2025.

Target price is $11.00 Current Price is $10.79 Difference: $0.21
If MFG meets the Goldman Sachs target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $10.11, suggesting downside of -6.3%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 65.00 cents and EPS of 78.00 cents.
At the last closing share price the estimated dividend yield is 6.02%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 13.83.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 69.4, implying annual growth of -47.4%.
Current consensus DPS estimate is 55.9, implying a prospective dividend yield of 5.2%.
Current consensus EPS estimate suggests the PER is 15.5.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 52.00 cents and EPS of 75.00 cents.
At the last closing share price the estimated dividend yield is 4.82%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.39.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 73.5, implying annual growth of 5.9%.
Current consensus DPS estimate is 60.8, implying a prospective dividend yield of 5.6%.
Current consensus EPS estimate suggests the PER is 14.7.

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

QBE    QBE INSURANCE GROUP LIMITED

Insurance – Overnight Price: $19.44

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

Goldman Sachs has reviewed initial Jan 1 reinsurance renewals updates from Guy Carpenter and AON which has implications for QBE as the company renews its reinsurance program on Jan 1.

According to the broker, the updates are incrementally positive for QBE given Guy Carpenter flagged reductions in risk-adjusted reinsurance renewal rates for non-loss impacted property catastrophe covers of 5-15%.

Also, reinsurance appetite was estimated to be up 10-15% reflecting an increase in reinsurance capital which also helped insurers purchase protection at lower rates 

No changes to the Buy rating or target price.

This report was published on December 31, 2024.

Target price is $20.00 Current Price is $19.44 Difference: $0.56
If QBE meets the Goldman Sachs target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $20.95, suggesting upside of 7.7%(ex-dividends)
The company’s fiscal year ends in December.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 56.00 cents and EPS of 161.14 cents.
At the last closing share price the estimated dividend yield is 2.88%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.06.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 178.3, implying annual growth of N/A.
Current consensus DPS estimate is 72.1, implying a prospective dividend yield of 3.7%.
Current consensus EPS estimate suggests the PER is 10.9.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 58.00 cents and EPS of 174.83 cents.
At the last closing share price the estimated dividend yield is 2.98%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.12.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 186.4, implying annual growth of 4.5%.
Current consensus DPS estimate is 78.9, implying a prospective dividend yield of 4.1%.
Current consensus EPS estimate suggests the PER is 10.4.

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

WAF    WEST AFRICAN RESOURCES LIMITED

Gold & Silver – Overnight Price: $1.56

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

Canaccord Genuity highlights West African Resources’ full 2024 gold production of 206.6koz from Sanbrado mine in Burkina Faso beat its estimate of 200koz.

The broker expects the company to transition from a single asset producer to dual with the large Kiaka open pit coming online in the September quarter 2025.

Canaccord expects Sanbrado to produce 200koz and Kiaka to produce 111koz in 2025. 

Looking ahead, the broker expects West African Resources to provide 2025 guidance alongside 10-year production plan and updated resources and reserves next month.

Target price is unchanged at $3.7. Buy rating remains.

This report was published on January 8, 2025.

Target price is $3.70 Current Price is $1.56 Difference: $2.135
If WAF meets the Canaccord Genuity target it will return approximately 136% (excluding dividends, fees and charges).
The company’s fiscal year ends in December.

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

---

Disclaimer:
The content of this information does in no way reflect the opinions of FNArena, or of its journalists. In fact we don’t have any opinion about the stock market, its value, future direction or individual shares. FNArena solely reports about what the main experts in the market note, believe and comment on. By doing so we believe we provide experienced, intelligent investors with a valuable tool that helps them in making up their own minds, reading market trends and getting a feel for what is happening beneath the surface.

This document is provided for informational purposes only. It does not constitute an offer to sell or a solicitation to buy any security or other financial instrument. FNArena employs very experienced journalists who base their work on information believed to be reliable and accurate, though no guarantee is given that the daily report is accurate or complete. Investors should contact their personal adviser before making any investment decision.

Decisions about inclusions in this Report are made independently of the providers of stock market research and at full discretion of the team of journalists responsible for content at FNArena. Inclusion does not equal endorsement, in any way, shape or form. This Report is provided for informational purposes only.

Click to view our Glossary of Financial Terms