Australian Broker Call
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March 03, 2023
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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
ALG - | Ardent Leisure | Upgrade to Hold from Lighten | Ord Minnett |
AVH - | Avita Medical | Initiation of coverage with Add | Morgans |
MIN - | Mineral Resources | Downgrade to Lighten from Hold | Ord Minnett |
UMG - | United Malt | Upgrade to Accumulate from Hold | Ord Minnett |
ALG ARDENT LEISURE GROUP LIMITED
Travel, Leisure & Tourism
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Overnight Price: $0.67
Ord Minnett rates ALG as Upgrade to Hold from Lighten (3) -
Ord Minnett upgrades its rating for Ardent Leisure to Hold from Lighten on valuation after the share price has fallen in recent days.
The 60c target price is retained.
Target price is $0.60 Current Price is $0.67 Difference: minus $0.07 (current price is over target).
If ALG meets the Ord Minnett target it will return approximately minus 10% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 0.00 cents and EPS of 0.20 cents. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 0.00 cents and EPS of 2.00 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.12
Macquarie rates AMI as Outperform (1) -
In a major de-risking for Aurelia Metals' Federation project, according to Macquarie, the NSW Department of Planning and Environment for Federation has granted Development Consent.
The broker notes the Development Consent will allow the company to pursue funding options to bring the project online.
Outperform rating and 20c target price retained.
Target price is $0.20 Current Price is $0.12 Difference: $0.08
If AMI meets the Macquarie target it will return approximately 67% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.10 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of 0.50 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.07
Morgans rates AMS as No Rating (-1) -
Atomos has entered voluntary suspension pending the audit outcome of its 1H results. Management cited resourcing issues across operating jurisdictions as the reason for delay.
A trading update suggests to Morgans ongoing softness in trading conditions. Given increased uncertainty in the retail environment, management explained the business may not return to profits until FY24.
The board has appointed a corporate advisor to strategically review the business. In the meantime, the broker awaits further clarity and places the company's prior Add rating and 75c target under review.
Current Price is $0.07. Target price not assessed.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
AVH AVITA MEDICAL INC
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $3.91
Morgans rates AVH as Initiation of coverage with Add (1) -
Morgans initiates coverage on regenerative (skin restoration) medicine company Avita Medical with an Add rating and $4.45 target.
The company has an approved device called the Recell system (spray-on skin) and is largely targeting the US acute burns market. Further approvals are pending mid-2023 in the areas of soft tissue repair and vitiligo (loss of skin colour in patches).
The broker believes management's estimates for total addressable markets are reasonable, as follows: burns US$600m, soft tissue repair US$1bn and vitiligo US$5.2bn.
The analysts note recent revenue guidance for both the 1Q and the whole of 2023 by CEO Jim Corbett has propelled the share price higher.
Target price is $4.45 Current Price is $3.91 Difference: $0.54
If AVH meets the Morgans target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Morgans forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 17.00 cents. |
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 10.00 cents. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.17
Macquarie rates CNB as Outperform (1) -
Following drilling results, management at Carnaby Resources indicated the “the 40,000m RC and diamond drilling program will no doubt culminate in a very material maiden resource for the Greater Duchess Copper Gold project.”
The broker believes the maiden resource in the 2Q of 2023 could exceed 300kt of copper and presents a major near-term catalyst.
Outperform and $1.70 target retained.
Target price is $1.70 Current Price is $1.17 Difference: $0.53
If CNB meets the Macquarie target it will return approximately 45% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 8.20 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.60 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CSL CSL LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $291.80
Morgan Stanley rates CSL as Overweight (1) -
Morgan Stanley notes for every three Myasthenia Gravis (MG) patients lost to Vyvgart prescription medicine, CSL would need to diagnose only one primary immunodeficiency disease (PID) patient.
The brokers feels the need to reiterate this statement after Dutch-based competitor Argenx released 4Q results disclosing Vyvgart revenues in line with Morgan Stanley's forecast.
The Overweight rating and $339 target are unchanged. Industry View: In-Line.
Target price is $339.00 Current Price is $291.80 Difference: $47.2
If CSL meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $335.99, suggesting upside of 14.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 456.07 cents and EPS of 807.64 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 818.8, implying annual growth of N/A. Current consensus DPS estimate is 379.2, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 35.7. |
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 645.25 cents and EPS of 984.22 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1037.6, implying annual growth of 26.7%. Current consensus DPS estimate is 490.3, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 28.2. |
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
Overnight Price: $0.14
Macquarie rates CVN as Neutral (3) -
Carnarvon Energy has sold -10% of its Bedout Basin interests for US$146m, which Macquarie points out reduces the need for an equity raise ahead of capex at Dorado and exploration costs at Bedout.
The broker expects reserves-based debt is available to support the company's 10% stake in the Dorado project.
The Neutral rating and 16c target are unchanged.
Target price is $0.16 Current Price is $0.14 Difference: $0.02
If CVN meets the Macquarie target it will return approximately 14% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 0.40 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.60 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CWY CLEANAWAY WASTE MANAGEMENT LIMITED
Industrial Sector Contractors & Engineers
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Overnight Price: $2.60
Citi rates CWY as Neutral (3) -
After reviewing Cleanaway Waste Management's 1H results (released over a week ago), Citi makes only slight upgrades to its earnings forecasts.
The broker expects underlying revenue will stay strong with ongoing pass-through of price rises and a full contribution from the GRL acquisition.
FY23 guidance is for underlying EBITDA of $670m, which reflects a slightly higher skew to the 2H (GRL acquisition again).
The broker raises its target to $2.95 from $2.84. Neutral.
Target price is $2.95 Current Price is $2.60 Difference: $0.35
If CWY meets the Citi target it will return approximately 13% (excluding dividends, fees and charges).
Current consensus price target is $2.75, suggesting upside of 5.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Citi forecasts a full year FY23 dividend of 4.80 cents and EPS of 6.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.0, implying annual growth of 75.4%. Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 37.1. |
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 5.60 cents and EPS of 7.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.9, implying annual growth of 27.1%. Current consensus DPS estimate is 5.9, implying a prospective dividend yield of 2.3%. Current consensus EPS estimate suggests the PER is 29.2. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.20
Morgans rates EPY as Add (1) -
After reviewing 1H results by EarlyPay, Morgans comments outsized exposures and losses have disappointed and it will take time for investors to rebuild confidence.
A before tax loss of -$7.5m including expected credit loss (ECL) provisioning of- $14.1m was reported. The company has provisioned -$9.6m against the RevRoof exposure (detailed late-2022) and improved procedures and policies have now been implemented.
Excluding RevRoof, underlying NPAT was $1.6m for the 1H, which included a further -$4.5m of additional provisioning.
The target is slashed to 28c from 52c though the broker retains an Add rating, noting the potential for corporate activity.
Target price is $0.28 Current Price is $0.20 Difference: $0.08
If EPY meets the Morgans target it will return approximately 40% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Morgans forecasts a full year FY23 EPS of minus 1.40 cents. |
Forecast for FY24:
Morgans forecasts a full year FY24 EPS of 2.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.61
Morgan Stanley rates IAG as Equal-weight (3) -
December-22 APRA data show personal outgrew commercial lines of insurance for the first time in five years.
Morgan Stanley suggests this data is supportive for Insurance Australia Group, despite ongoing market share losses.
Equal-weight rating and $4.75 target retained. Industry View: In-Line.
Target price is $4.75 Current Price is $4.61 Difference: $0.14
If IAG meets the Morgan Stanley target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $5.23, suggesting upside of 12.2% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 16.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 25.2, implying annual growth of 78.9%. Current consensus DPS estimate is 16.7, implying a prospective dividend yield of 3.6%. Current consensus EPS estimate suggests the PER is 18.5. |
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 32.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 35.8, implying annual growth of 42.1%. Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 6.1%. Current consensus EPS estimate suggests the PER is 13.0. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.16
Macquarie rates KAR as Outperform (1) -
Following confirmation by Karoon Energy a 9.2% oil export tax will apply in Brazil from March 1 for four months, Macquarie suggests uncertainty prevails over whether this period is followed by a more permanent tax or other reforms.
Management expects the four-month impact will be in the range of -US$22-35m. Unfortunately, bemoans the broker, the tax is being levied at a point of peak oil production rates for the company.
The Outperform rating is unchanged and the target falls by -1.6% to $3.00.
Target price is $3.00 Current Price is $2.16 Difference: $0.84
If KAR meets the Macquarie target it will return approximately 39% (excluding dividends, fees and charges).
Current consensus price target is $3.16, suggesting upside of 48.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 64.99 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 57.9, 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 3.7. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of 74.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 73.0, implying annual growth of 26.1%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 2.9. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $90.03
Ord Minnett rates MIN as Downgrade to Lighten from Hold (4) -
Ord Minnett downgrades its rating for Mineral Resources to Lighten from Hold on valuation alone, after a recent share price rally.
The $75 target price is maintained.
Target price is $75.00 Current Price is $90.03 Difference: minus $15.03 (current price is over target).
If MIN meets the Ord Minnett target it will return approximately minus 17% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $97.33, suggesting upside of 8.6% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 587.00 cents and EPS of 870.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 896.5, implying annual growth of 384.9%. Current consensus DPS estimate is 474.4, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 10.0. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 862.10 cents and EPS of 1737.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 1511.7, implying annual growth of 68.6%. Current consensus DPS estimate is 767.6, implying a prospective dividend yield of 8.6%. Current consensus EPS estimate suggests the PER is 5.9. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.75
Morgan Stanley rates SUN as Overweight (1) -
December-22 APRA data show personal outgrew commercial lines of insurance for the first time in five years.
Morgan Stanley suggests this data is supportive for Suncorp Group, despite ongoing market share losses.
Overweight rating and $14.50 target retained. Industry View: In-Line.
Target price is $14.50 Current Price is $12.75 Difference: $1.75
If SUN meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $14.50, suggesting upside of 13.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Morgan Stanley forecasts a full year FY23 dividend of 79.00 cents and EPS of 93.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 100.9, implying annual growth of 87.5%. Current consensus DPS estimate is 77.3, implying a prospective dividend yield of 6.1%. Current consensus EPS estimate suggests the PER is 12.6. |
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 92.00 cents and EPS of 111.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 103.0, implying annual growth of 2.1%. Current consensus DPS estimate is 81.0, implying a prospective dividend yield of 6.4%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.9
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.45
Ord Minnett rates UMG as Upgrade to Accumulate from Hold (2) -
Ord Minnett upgrades its rating for United Malt to Accumulate from Hold on valuation after recent share price slippage.
The $4.00 target price is retained.
Target price is $4.00 Current Price is $3.45 Difference: $0.55
If UMG meets the Ord Minnett target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $3.86, suggesting upside of 12.7% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 8.00 cents and EPS of 13.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.8, implying annual growth of 178.4%. Current consensus DPS estimate is 4.3, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 31.8. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 15.00 cents and EPS of 25.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.5, implying annual growth of 99.1%. Current consensus DPS estimate is 13.1, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 16.0. |
Market Sentiment: 0.5
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 | |
AVH | Avita Medical | $4.07 | Morgans | 4.45 | N/A | - |
CWY | Cleanaway Waste Management | $2.60 | Citi | 2.95 | 2.84 | 3.87% |
EPY | EarlyPay | $0.21 | Morgans | 0.28 | 0.52 | -46.15% |
KAR | Karoon Energy | $2.13 | Macquarie | 3.00 | 3.05 | -1.64% |
Summaries
ALG | Ardent Leisure | Upgrade to Hold from Lighten - Ord Minnett | Overnight Price $0.67 |
AMI | Aurelia Metals | Outperform - Macquarie | Overnight Price $0.12 |
AMS | Atomos | No Rating - Morgans | Overnight Price $0.07 |
AVH | Avita Medical | Initiation of coverage with Add - Morgans | Overnight Price $3.91 |
CNB | Carnaby Resources | Outperform - Macquarie | Overnight Price $1.17 |
CSL | CSL | Overweight - Morgan Stanley | Overnight Price $291.80 |
CVN | Carnarvon Energy | Neutral - Macquarie | Overnight Price $0.14 |
CWY | Cleanaway Waste Management | Neutral - Citi | Overnight Price $2.60 |
EPY | EarlyPay | Add - Morgans | Overnight Price $0.20 |
IAG | Insurance Australia Group | Equal-weight - Morgan Stanley | Overnight Price $4.61 |
KAR | Karoon Energy | Outperform - Macquarie | Overnight Price $2.16 |
MIN | Mineral Resources | Downgrade to Lighten from Hold - Ord Minnett | Overnight Price $90.03 |
SUN | Suncorp Group | Overweight - Morgan Stanley | Overnight Price $12.75 |
UMG | United Malt | Upgrade to Accumulate from Hold - Ord Minnett | Overnight Price $3.45 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 7 |
2. Accumulate | 1 |
3. Hold | 4 |
4. Reduce | 1 |
Friday 03 March 2023
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