Australian Broker Call
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January 13, 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
Today's Upgrades and Downgrades
| CVN - | Carnarvon Energy | Downgrade to Accumulate from Buy | Ord Minnett |
AGL AGL ENERGY LIMITED
Infrastructure & Utilities
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Overnight Price: $7.03
Ord Minnett rates AGL as Buy (1) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
Price target for AGL Energy has lifted to $8.70 from $7.55. Buy rating retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $8.70 Current Price is $7.03 Difference: $1.67
If AGL meets the Ord Minnett target it will return approximately 24% (excluding dividends, fees and charges).
Current consensus price target is $7.17, suggesting downside of -1.2% (ex-dividends)
Forecast for FY22:
Current consensus EPS estimate is 41.5, implying annual growth of N/A. Current consensus DPS estimate is 30.8, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 17.5. |
Forecast for FY23:
Current consensus EPS estimate is 44.6, implying annual growth of 7.5%. Current consensus DPS estimate is 34.0, implying a prospective dividend yield of 4.7%. Current consensus EPS estimate suggests the PER is 16.3. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
ASB AUSTAL LIMITED
Commercial Services & Supplies
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Overnight Price: $1.97
Citi rates ASB as Buy (1) -
Citi analysts continue to hold a positive view on shipbuilder Austal, as also witnessed by their Buy rating for the stock.
In this latest update, the analysts observe an apparent acceleration in Austal’s job postings across the 6 months ending December 2021 relative to the first 6 months of 2021.
Citi suggests this could imply Austal is increasingly positive about its outlook. Target $3.09.
Target price is $3.09 Current Price is $1.97 Difference: $1.12
If ASB meets the Citi target it will return approximately 57% (excluding dividends, fees and charges).
Current consensus price target is $2.62, suggesting upside of 31.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 8.00 cents and EPS of 17.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.2, implying annual growth of -14.9%. Current consensus DPS estimate is 9.1, implying a prospective dividend yield of 4.6%. Current consensus EPS estimate suggests the PER is 10.4. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 4.70 cents and EPS of 10.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.6, implying annual growth of -8.3%. Current consensus DPS estimate is 8.5, implying a prospective dividend yield of 4.3%. Current consensus EPS estimate suggests the PER is 11.3. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.38
Ord Minnett rates BPT as Buy (1) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
The price target for Beach Energy increased by 5c to $1.85. Buy rating retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $1.85 Current Price is $1.38 Difference: $0.47
If BPT meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).
Current consensus price target is $1.65, suggesting upside of 15.9% (ex-dividends)
Forecast for FY22:
Current consensus EPS estimate is 19.1, implying annual growth of 37.6%. Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 1.4%. Current consensus EPS estimate suggests the PER is 7.4. |
Forecast for FY23:
Current consensus EPS estimate is 17.3, implying annual growth of -9.4%. Current consensus DPS estimate is 2.4, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 8.2. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.28
Ord Minnett rates COE as Accumulate (2) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
The price target for Cooper Energy has remained unchanged at 33c. Accumulate rating retained.
Target price is $0.33 Current Price is $0.28 Difference: $0.05
If COE meets the Ord Minnett target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $0.28, suggesting downside of -7.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 0.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -1.3, 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 N/A. |
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 0.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 0.4, 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 75.0. |
Market Sentiment: 0.1
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.35
Ord Minnett rates CVN as Downgrade to Accumulate from Buy (2) -
Ord Minnett revisits resources stocks after updating its commodity price forecasts and also increases earnings estimates across its energy and utilities coverage by roughly 21% for 2023/FY23, with the largest beneficiaries being AGL Energy and Origin Energy.
The broker downgrades Carnarvon Petroleum to Accumulate from Buy, given the recent sharp run in the share price.
The in-house Brent oil price forecast (thanks JPMorgan) is now for an average price of US$78 per barrel for 2022 (+7%), US$75 for 2023 (+7%) and US$71 for CY24 (+2%).
Target price is $0.38 Current Price is $0.35 Difference: $0.03
If CVN meets the Ord Minnett target it will return approximately 9% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.00 cents. |
Forecast for FY23:
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GUD G.U.D. HOLDINGS LIMITED
Household & Personal Products
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Overnight Price: $11.92
Citi rates GUD as Buy (1) -
A general update on the car parts market in Australia has led to a reshuffle in Citi's ranking of sector favourites with GUD Holdings now the number one preferred exposure.
Citi sees consumers holding onto existing vehicles for longer, which feeds into greater demand for used cars also due to challenges in buying new vehicles. As a result, Australia should find itself with an aging car parc and this should be a tailwind for both GUD Holdings and Bapcor.
No further changes were made.
Target price is $15.70 Current Price is $11.92 Difference: $3.78
If GUD meets the Citi target it will return approximately 32% (excluding dividends, fees and charges).
Current consensus price target is $14.71, suggesting upside of 22.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY22:
Citi forecasts a full year FY22 EPS of 79.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 83.7, implying annual growth of 28.8%. Current consensus DPS estimate is 40.9, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 14.4. |
Forecast for FY23:
Citi forecasts a full year FY23 EPS of 102.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 99.1, implying annual growth of 18.4%. Current consensus DPS estimate is 50.3, implying a prospective dividend yield of 4.2%. Current consensus EPS estimate suggests the PER is 12.2. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.60
Ord Minnett rates KGL as Initiation of coverage with Speculative Buy (1) -
Ord Minnett initiates coverage of simple copper play KGL Resources with a Speculative Buy rating and an 80c target price.
KGL is developing a high-grade copper project in the Northern Territory. Jervois is a full permitted brownfield project with a 23mt resource across three deposits.
The broker spies upside for both grade and mine life and notes all the main deposits are open at depth.
Ord Minnett expects the company to rerate over 2022, the resource implying a high margin of 38% versus 25% for peers. The company has cash of $18m and no debt.
Target price is $80.00 Current Price is $0.60 Difference: $79.4
If KGL meets the Ord Minnett target it will return approximately 13233% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 0.40 cents. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 1.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.53
Ord Minnett rates ORG as Hold (3) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
Origin Energy's price target has improved to $5.90 from $5.25. Hold rating retained.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $5.90 Current Price is $5.53 Difference: $0.37
If ORG meets the Ord Minnett target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $5.91, suggesting upside of 3.5% (ex-dividends)
Forecast for FY22:
Current consensus EPS estimate is 27.6, implying annual growth of N/A. Current consensus DPS estimate is 22.2, implying a prospective dividend yield of 3.9%. Current consensus EPS estimate suggests the PER is 20.7. |
Forecast for FY23:
Current consensus EPS estimate is 28.2, implying annual growth of 2.2%. Current consensus DPS estimate is 25.5, implying a prospective dividend yield of 4.5%. Current consensus EPS estimate suggests the PER is 20.2. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.67
Credit Suisse rates PBH as Outperform (1) -
Credit Suisse cuts Pointsbet's target price to $8 from $12.80 heading into the first-half results. Outperform rating retained.
The broker assesses news that Pointsbet has been awarded a New York sports betting licence (the company is awaiting final regulatory checks and should launch in late January), and says the launch behind major competitors (who hit the ground running on January 8 with 5.8m users signing in 12 hours) could signal a longer runway for growing market share, although the size of the market may be larger.
The broker says data suggests Pointsbet has the second most generous promotional deal, which would make them a strong contender in the secondary market. On the downside, the New York business is not expected to turn a profit until FY28 given the 51% tax rate.
The broker cuts long-term US market share assumptions from 10% to 7%, noting Pointsbet has not increased US share in the past six months but is aiming for 10% (and expects to launch in several states this half), and that competition has become extreme. But with the New York licence in its back pocket, Credit Suisse considers the stock an attractive target.
The broker warns that when the cash balance drops to about $300m, a capital raising will likely be required.
Target price is $8.00 Current Price is $6.67 Difference: $1.33
If PBH meets the Credit Suisse target it will return approximately 20% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 228.00 cents. |
Forecast for FY23:
Credit Suisse forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 213.00 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.91
Citi rates SHV as Buy (1) -
Citi analysts observe persistent logistical issues and softer export demand continue to impact US almond export shipments. They also point out new crop sales continue to improve month-on-month.
January is shaping up to be a drier month for California and the analysts suggest this could be positive for almond prices. Buy.
Target price is $9.00 Current Price is $5.91 Difference: $3.09
If SHV meets the Citi target it will return approximately 52% (excluding dividends, fees and charges).
The company's fiscal year ends in September.
Forecast for FY22:
Citi forecasts a full year FY22 dividend of 18.00 cents and EPS of 37.30 cents. |
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 34.00 cents and EPS of 69.20 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates STO as Buy (1) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
The price target for Santos improved to $8.80 from $8.45. Buy rating remains unchanged.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $8.80 Current Price is $6.98 Difference: $1.82
If STO meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).
Current consensus price target is $8.60, suggesting upside of 21.7% (ex-dividends)
Forecast for FY21:
Current consensus EPS estimate is 56.1, implying annual growth of N/A. Current consensus DPS estimate is 16.6, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY22:
Current consensus EPS estimate is 77.2, implying annual growth of 37.6%. Current consensus DPS estimate is 18.0, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 9.2. |
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
Overnight Price: $4.60
Ord Minnett rates SXY as Hold (3) -
Ord Minnett has conducted a broad industry update, incorporating, among other things, a higher oil price forecast for the years ahead.
The price target for Senex Energy stays at $4.60, alongside an unchanged Hold rating.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $4.60 Current Price is $4.60 Difference: $0
If SXY meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $4.42, suggesting downside of -4.2% (ex-dividends)
Forecast for FY22:
Current consensus EPS estimate is 21.4, implying annual growth of -40.4%. Current consensus DPS estimate is 8.9, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 21.5. |
Forecast for FY23:
Current consensus EPS estimate is 28.4, implying annual growth of 32.7%. Current consensus DPS estimate is 12.1, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 16.2. |
Market Sentiment: 0.0
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 | |
| AGL | AGL Energy | $7.26 | Ord Minnett | 8.70 | 7.55 | 15.23% |
| ASB | Austal | $1.99 | Citi | 3.09 | 3.10 | -0.32% |
| BPT | Beach Energy | $1.42 | Ord Minnett | 1.85 | 1.80 | 2.78% |
| ORG | Origin Energy | $5.71 | Ord Minnett | 5.90 | 5.25 | 12.38% |
| PBH | PointsBet | $6.28 | Credit Suisse | 8.00 | 12.80 | -37.50% |
| STO | Santos | $7.07 | Ord Minnett | 8.80 | 8.45 | 4.14% |
Summaries
| AGL | AGL Energy | Buy - Ord Minnett | Overnight Price $7.03 |
| ASB | Austal | Buy - Citi | Overnight Price $1.97 |
| BPT | Beach Energy | Buy - Ord Minnett | Overnight Price $1.38 |
| COE | Cooper Energy | Accumulate - Ord Minnett | Overnight Price $0.28 |
| CVN | Carnarvon Energy | Downgrade to Accumulate from Buy - Ord Minnett | Overnight Price $0.35 |
| GUD | G.U.D. Holdings | Buy - Citi | Overnight Price $11.92 |
| KGL | KGL Resources | Initiation of coverage with Speculative Buy - Ord Minnett | Overnight Price $0.60 |
| ORG | Origin Energy | Hold - Ord Minnett | Overnight Price $5.53 |
| PBH | PointsBet | Outperform - Credit Suisse | Overnight Price $6.67 |
| SHV | Select Harvests | Buy - Citi | Overnight Price $5.91 |
| STO | Santos | Buy - Ord Minnett | Overnight Price $6.98 |
| SXY | Senex Energy | Hold - Ord Minnett | Overnight Price $4.60 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 8 |
| 2. Accumulate | 2 |
| 3. Hold | 2 |
Thursday 13 January 2022
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