Australian Broker Call
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November 02, 2022
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COMPANIES DISCUSSED IN THIS ISSUE
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The number next to the symbol represents the number of brokers covering it for this report -(if more than 1).
Last Updated: 05:00 PM
Your daily news report on the latest recommendation, valuation, forecast and opinion changes.
This report includes concise but limited reviews of research recently published by Stockbrokers, 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.
For more info about the different terms used by stockbrokers, as well as the different methodologies behind similar sounding ratings, download our guide HERE
Overnight Price: $18.16
UBS rates AMC as Neutral (3) -
In a first glance at today's 1Q results for Amcor, UBS assesses a solid result, with in-line underlying EPS growth of 2%.
The broker highlights a better price/mix from North America and Europe offset both softer volumes and rising raw material costs.
A greater-than-expected free cashflow (FCF) outflow indicated the need for higher inventory in the supply chain environment and rising raw material costs, explains the analyst.
FY23 reported EPS growth guidance was lowered to a range of -4%-0% from -1%-4%, due to US dollar strength. Constant FX EPS growth guidance of 3-8% was reiterated.
The $19.40 target and Neutral rating are retained.
Target price is $19.40 Current Price is $18.16 Difference: $1.24
If AMC meets the UBS target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $18.58, suggesting upside of 6.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
UBS forecasts a full year FY23 dividend of 69.59 cents and EPS of 115.04 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 126.8, implying annual growth of N/A. Current consensus DPS estimate is 75.7, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 13.7. |
Forecast for FY24:
UBS forecasts a full year FY24 dividend of 71.01 cents and EPS of 120.72 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 133.3, implying annual growth of 5.1%. Current consensus DPS estimate is 78.4, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 13.0. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.09
Morgans rates AUA as Speculative Buy (1) -
Morgans retains its Speculative Buy rating and $0.29 target price for Audeara following 1Q results that revealed the third highest product sales quarter ever, but down on the prior quarter.
The broker notes sales will stay rather lumpy until more international sales kick-in. The expansion overseas is well ahead of expectations, according to the analyst, as are operating and manufacturing costs.
Target price is $0.29 Current Price is $0.09 Difference: $0.205
If AUA meets the Morgans target it will return approximately 241% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 1.10 cents. |
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 0.00 cents and EPS of 1.40 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.93
Morgans rates CRN as Add (1) -
Morgans had already assumed lower 3Q production for Coronado Global Resources due to wet weather. Offsets to this weakness came from better price realisation and recent price strength.
Revenue was 8% above the analyst's forecast while earnings (EBITDA) were a 19% beat. A special dividend of US13.4cps was declared.
Based on current multiples, the broker believes shares are too cheap and retains an Add rating. The target rises to $2.40 from $2.24 on 2-7% upgrades to 2022 and 2023 hard coking coal price assumptions.
Target price is $2.40 Current Price is $1.93 Difference: $0.47
If CRN meets the Morgans target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $2.48, suggesting upside of 18.1% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 62.49 cents and EPS of 73.85 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.6, implying annual growth of N/A. Current consensus DPS estimate is 72.3, implying a prospective dividend yield of 34.5%. Current consensus EPS estimate suggests the PER is 2.4. |
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 32.67 cents and EPS of 44.03 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.7, implying annual growth of -15.9%. Current consensus DPS estimate is 53.9, implying a prospective dividend yield of 25.7%. Current consensus EPS estimate suggests the PER is 2.8. |
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
DMP DOMINO'S PIZZA ENTERPRISES LIMITED
Food, Beverages & Tobacco
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Overnight Price: $63.39
Citi rates DMP as Buy (1) -
Citi warns Domino's Pizza's European operations are likely to be weighed down by cost pressures, given read throughs from competitor Alsea's latest quarter. Despite sales growth, Alsea reported food and energy inflation dragged on profitability.
The broker expects the same cost pressures could slow down Domino's Pizza Enterprises's expected store roll out in Europe. Citi feels some inflationary headwinds are moderating, and remains positive on the medium-term outlook.
The Buy rating and target price of $84.40 are retained.
Target price is $84.40 Current Price is $63.39 Difference: $21.01
If DMP meets the Citi target it will return approximately 33% (excluding dividends, fees and charges).
Current consensus price target is $82.38, suggesting upside of 40.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 154.60 cents and EPS of 193.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 207.3, implying annual growth of 13.0%. Current consensus DPS estimate is 167.7, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 28.3. |
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 180.00 cents and EPS of 225.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 250.7, implying annual growth of 20.9%. Current consensus DPS estimate is 204.7, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 23.4. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GMA GENWORTH MORTGAGE INSURANCE AUSTRALIA LIMITED
Banks
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Overnight Price: $2.85
Macquarie rates GMA as Underperform (5) -
Genworth Mortgage Insurance Australia has narrowed its net earned premium guidance to the top end of its previous $375-435m range, and has updated net claims incurred guidance to between -$25m and $25m.
According to Macquarie, a -50.7% gross written premium decline on the previous comparable period could be a driver of lower net earned premium growth in coming years. The broker finds the decline to reflect lower volumes of new high loan-to-value ration loans.
The Underperform rating is retained and the target price increases to $2.35 from $2.20.
Target price is $2.35 Current Price is $2.85 Difference: minus $0.5 (current price is over target).
If GMA meets the Macquarie target it will return approximately minus 18% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in December.
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 24.00 cents and EPS of 63.50 cents. |
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 24.00 cents and EPS of 43.10 cents. |
Market Sentiment: -1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $17.65
Ord Minnett rates GMG as Hold (3) -
Goodman Group has updated the market with September quarter numbers and Ord Minnett, in an initial response, observes the property developer has made no change to its 11% EPS growth guidance for FY23.
Development work in progress is $13.8bn, up 2% on the previous quarter and 9% on last year. External assets under management (AUM) was up to $73.2bn, up 7% and 26% respectively.
The broker highlights Goodman Group retains material built-up development and performance fees, offering respectively two years’ visibility and circa $1.2bn over five years.
The combination should ensure annual earnings growth in the 10-15% range for the next few years and 6-8% longer-term growth, the broker assures.
On the negative side, the broker points out there are early signs of development margins moderating from unsustainably high levels, not unexpected.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $22.00 Current Price is $17.65 Difference: $4.35
If GMG meets the Ord Minnett target it will return approximately 25% (excluding dividends, fees and charges).
Current consensus price target is $22.74, suggesting upside of 32.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 30.00 cents and EPS of 93.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 93.2, implying annual growth of -49.1%. Current consensus DPS estimate is 30.2, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 18.4. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 32.00 cents and EPS of 99.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.3, implying annual growth of 7.6%. Current consensus DPS estimate is 31.3, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 17.1. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates IGO as Buy (1) -
IGO's September-quarter update met UBS forecasts, strong pricing for quality spodumene and low costs offsetting lower mining rates. Nickel production was in line. The dividend disappointed as did a heftier than forecast capital expenditure bill at Cosmos.
Management reiterated guidance.
UBS observes the company's share price is approaching the broker's target price, and the broker believes spodumene prices may have peaked.
Rating downgraded to Neutral from Buy. Target price moves to $15.70 from the last entry in the FNArena database on October 5 of $16.15.
Target price is $15.70 Current Price is $15.34 Difference: $0.36
If IGO meets the UBS target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $15.06, suggesting downside of -0.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
UBS forecasts a full year FY23 EPS of 248.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 198.0, implying annual growth of 353.1%. Current consensus DPS estimate is 46.1, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 7.6. |
Forecast for FY24:
UBS forecasts a full year FY24 EPS of 214.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 166.0, implying annual growth of -16.2%. Current consensus DPS estimate is 75.9, implying a prospective dividend yield of 5.0%. Current consensus EPS estimate suggests the PER is 9.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
JDO JUDO CAPITAL HOLDINGS LIMITED
Business & Consumer Credit
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Overnight Price: $1.24
Credit Suisse rates JDO as Outperform (1) -
Judo Capital's 1Q profit (PBT) of $23m was ahead of Credit Suisse's $17m estimate. Management guidance for FY23 also beat consensus forecasts, particularly around underlying net interest margin.
The broker now has greater confidence around the achievement of the company's at-scale metrics. While forecasts are upgraded, the $2.50 target and Outperform rating are unchanged.
Target price is $2.50 Current Price is $1.24 Difference: $1.265
If JDO meets the Credit Suisse target it will return approximately 102% (excluding dividends, fees and charges).
Current consensus price target is $1.93, suggesting upside of 57.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 0.00 cents and EPS of 7.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.6, 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 26.6. |
Forecast for FY24:
Credit Suisse forecasts a full year FY24 dividend of 0.00 cents and EPS of 9.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.8, implying annual growth of 69.6%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 15.7. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $32.70
Ord Minnett rates NAB as Accumulate (2) -
National Australia Bank is scheduled to release FY22 financials on November 9 and Ord Minnett, looking forward, is forecasting cash net profit of $7.226bn, slightly ahead of consensus.
H2 should show a net profit of $3.746bn and a final dividend of 78cps.
NAB's net interest margin (NIM) is expected to have risen 10bp half-on-half. The broker explains this means 8bp excluding the Markets/Treasury divisions and the acquisition of Citi’s Australian consumer business.
FY22 cost growth is expected to hit the upper 4% of management's guidance for 3-4%, while H2 should show growth of 4.5%.
Ord Minnett retains its Accumulate rating with a price target of $33.70 given NAB offers positive leverage to rising rates, and to business lending, with strong provision coverage.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $33.70 Current Price is $32.70 Difference: $1
If NAB meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $32.00, suggesting downside of -2.3% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 151.00 cents and EPS of 217.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 214.4, implying annual growth of 11.1%. Current consensus DPS estimate is 151.1, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 15.3. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 180.00 cents and EPS of 266.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 247.4, implying annual growth of 15.4%. Current consensus DPS estimate is 173.6, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 13.2. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PXS PHARMAXIS LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $0.06
Morgans rates PXS as Speculative Buy (1) -
Morgans lowers its target for Pharmaxis to 24cps from 25cps following a $10m capital raise to assist funding for top-line clinical results for the two key programs of myelofibrosis and established scars.
Top line results for myelofibrosis and established scars are expected around September 2023 and the 4Q of FY23, respectively. These are the two most advanced programs, along with the emergence of earlier-stage developments, explains the analyst.
The broker's forecasts are unchanged following a 1Q cashflow report and the Speculative Buy rating is kept.
Target price is $0.24 Current Price is $0.06 Difference: $0.177
If PXS meets the Morgans target it will return approximately 281% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.40 cents. |
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 2.70 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.11
Macquarie rates SDF as Outperform (1) -
With Treasury's Quality of Advice Review proposing further disclosure and pre-consent for commissions should be obtained, Macquarie expects there to be minimal, or no, impact on Steadfast Group's revenue.
The broker highlights disclosure changes and increased handling costs may incur a slight impact on expenses, but expects this to be minimal. Treasury's final report is due mid-December, but the broker does not anticipate further industry consultation or recommendation changes.
The Outperform rating and target price of $6.00 are retained.
Target price is $6.00 Current Price is $5.11 Difference: $0.89
If SDF meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $5.98, suggesting upside of 17.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 14.40 cents and EPS of 19.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.5, implying annual growth of 25.8%. Current consensus DPS estimate is 14.3, implying a prospective dividend yield of 2.8%. Current consensus EPS estimate suggests the PER is 22.7. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 16.20 cents and EPS of 21.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 24.4, implying annual growth of 8.4%. Current consensus DPS estimate is 15.6, implying a prospective dividend yield of 3.1%. Current consensus EPS estimate suggests the PER is 20.9. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Today's Price Target Changes
| Company | Last Price | Broker | New Target | Prev Target | Change | |
| CRN | Coronado Global Resources | $2.10 | Morgans | 2.40 | 2.24 | 7.14% |
| GMA | Genworth Mortgage Insurance Australia | $2.79 | Macquarie | 2.35 | 2.20 | 6.82% |
| IGO | IGO | $15.13 | UBS | 15.70 | 16.15 | -2.79% |
| PXS | Pharmaxis | $0.07 | Morgans | 0.24 | 0.25 | -4.00% |
Summaries
| AMC | Amcor | Neutral - UBS | Overnight Price $18.16 |
| AUA | Audeara | Speculative Buy - Morgans | Overnight Price $0.09 |
| CRN | Coronado Global Resources | Add - Morgans | Overnight Price $1.93 |
| DMP | Domino's Pizza Enterprises | Buy - Citi | Overnight Price $63.39 |
| GMA | Genworth Mortgage Insurance Australia | Underperform - Macquarie | Overnight Price $2.85 |
| GMG | Goodman Group | Hold - Ord Minnett | Overnight Price $17.65 |
| IGO | IGO | Buy - UBS | Overnight Price $15.34 |
| JDO | Judo Capital | Outperform - Credit Suisse | Overnight Price $1.24 |
| NAB | National Australia Bank | Accumulate - Ord Minnett | Overnight Price $32.70 |
| PXS | Pharmaxis | Speculative Buy - Morgans | Overnight Price $0.06 |
| SDF | Steadfast Group | Outperform - Macquarie | Overnight Price $5.11 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 7 |
| 2. Accumulate | 1 |
| 3. Hold | 2 |
| 5. Sell | 1 |
Wednesday 02 November 2022
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