Australian Broker Call
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January 11, 2024
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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
| AWC - | Alumina Ltd | Downgrade to Neutral from Buy | Citi |
Overnight Price: $1.15
Citi rates AWC as Downgrade to Neutral from Buy (3) -
Yesterday, Citi analysts seemed content with retaining their Buy/High Risk rating for Alumina Ltd but a subsequent appreciation in the share price has forced their hand: downgrade to Neutral.
The updated price target of $1.15 compares with $1.10 previously.
As also indicated yesterday, Citi does see a risk of higher alumina prices, which would also translate positively for Alumina Ltd.
Target price is $1.15 Current Price is $1.15 Difference: $0
If AWC meets the Citi target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $1.02, suggesting downside of -9.7% (ex-dividends)
Forecast for FY23:
Current consensus EPS estimate is -1.8, 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 FY24:
Current consensus EPS estimate is 5.7, 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 19.8. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.34
Bell Potter rates DLI as Speculative Buy (1) -
Delta Lithium has announced an initial Mineral Resource Estimate for its Yinnetharra project and Bell Potter highlights the combined Indicated and Inferred Resources now total 25.7Mt at 1.0% Li2O, across five deposits.
Also, the combined Mineral Resources across the company's two projects has now increased to 40.4Mt at 1.1% Li2O.
Following share price weakness in 2023, as the sector generally battles negative sentiment and lower pricing, Bell Potter sees upside for the share price in 2024, also because it sees a recovery starting in the price of lithium.
Speculative Buy rating retained while the valuation/price target falls to 75c.
Target price is $0.75 Current Price is $0.34 Difference: $0.41
If DLI meets the Bell Potter target it will return approximately 121% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.30 cents. |
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.20 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
GSS GENETIC SIGNATURES LIMITED
Pharmaceuticals & Biotech/Lifesciences
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Overnight Price: $0.44
Bell Potter rates GSS as Speculative Buy (1) -
Genetic Signatures is conducting a capital raising but Bell Potter assures its clientele it had already assumed as much.
The broker remains confident in a positive regulatory outcome as Genetic Signatures is in the process of providing Additional Information to the FDA following a 60-day Substantive Review of the GI Parasite Detection Kit.
The Speculative Buy rating remains in place while the target price declines to 80c from 83 cents prior.
This research was released yesterday.
Target price is $0.80 Current Price is $0.44 Difference: $0.365
If GSS meets the Bell Potter target it will return approximately 84% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 6.60 cents. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 2.90 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
HUB HUB24 LIMITED
Wealth Management & Investments
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Overnight Price: $35.94
Morgan Stanley rates HUB as Initiation of coverage with Overweight (1) -
Morgan Stanley has initiated coverage on ASX-listed financial platform operators Netwealth Group and key competitor Hub24. Its initial rating for both is Overweight. The maiden price target for Hub24 is $41.
Both operators have been steadily increasing their market share and Morgan Stanley thinks this trend is likely to continue. It sees a strong case for this to happen.
If the broker's projections prove accurate, local market shares of circa 7% and 6% for Netwealth and Hub24 will climb to 12% and 11% respectively by FY28.
Equally important: when taking into account the projected growth for the three years ahead, the broker sees current valuations as still attractive.
Target price is $41.00 Current Price is $35.94 Difference: $5.06
If HUB meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).
Current consensus price target is $36.42, suggesting downside of -0.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 36.50 cents and EPS of 81.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.7, implying annual growth of 73.4%. Current consensus DPS estimate is 37.4, implying a prospective dividend yield of 1.0%. Current consensus EPS estimate suggests the PER is 44.4. |
Forecast for FY25:
Morgan Stanley forecasts a full year FY25 dividend of 45.90 cents and EPS of 102.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 104.4, implying annual growth of 26.2%. Current consensus DPS estimate is 47.2, implying a prospective dividend yield of 1.3%. Current consensus EPS estimate suggests the PER is 35.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
LYC LYNAS RARE EARTHS LIMITED
Rare Earth Minerals
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Overnight Price: $6.27
Bell Potter rates LYC as Buy (1) -
Bell Potter highlights NdPr prices have failed to live up to positive expectations in 2023. Prices for all rare earths declined last year, the broker points out, except for Dysprosium (up 2% YoY), but NdPr oxide declined by some -38%.
The broker is hopeful price weakness will cause delay for additional supplies and this might improve the outlook for Lynas Rare Earths.
As the broker updates for weak pricing, earnings estimates decline for Lynas. Bell Potter's forecasts are now multiple percentages below market consensus forecasts.
Buy rating retained, target declines to $8.50 from $8.80.
Target price is $8.50 Current Price is $6.27 Difference: $2.23
If LYC meets the Bell Potter target it will return approximately 36% (excluding dividends, fees and charges).
Current consensus price target is $8.10, suggesting upside of 27.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of 19.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 22.1, implying annual growth of -35.1%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 28.9. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of 37.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 55.0, implying annual growth of 148.9%. Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A. Current consensus EPS estimate suggests the PER is 11.6. |
Market Sentiment: 0.8
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NWL NETWEALTH GROUP LIMITED
Wealth Management & Investments
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Overnight Price: $15.62
Morgan Stanley rates NWL as Initiation of coverage with Overweight (1) -
Morgan Stanley has initiated coverage on ASX-listed financial platform operators Netwealth Group and key competitor Hub24. Its initial rating for both is Overweight. Netwealth's price target is $17.50.
Both operators have been steadily increasing their market share and Morgan Stanley thinks this trend is likely to continue. It sees a strong case for this to happen.
If the broker's projections prove accurate, local market shares of circa 7% and 6% for Netwealth and Hub24 will climb to 12% and 11% respectively by FY28.
Equally important: when taking into account the projected growth for the three years ahead, the broker sees current valuations as still attractive.
Target price is $17.50 Current Price is $15.62 Difference: $1.88
If NWL meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $15.03, suggesting downside of -5.9% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Morgan Stanley forecasts a full year FY24 dividend of 29.30 cents and EPS of 34.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 34.1, implying annual growth of 23.8%. Current consensus DPS estimate is 28.3, implying a prospective dividend yield of 1.8%. Current consensus EPS estimate suggests the PER is 46.8. |
Forecast for FY25:
Morgan Stanley forecasts a full year FY25 dividend of 35.10 cents and EPS of 41.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.9, implying annual growth of 19.9%. Current consensus DPS estimate is 33.9, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 39.0. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PTM PLATINUM ASSET MANAGEMENT LIMITED
Wealth Management & Investments
More Research Tools In Stock Analysis - click HERE
Overnight Price: $1.22
Bell Potter rates PTM as Sell (5) -
Platinum Asset Management remains on Sell at Bell Potter with a target price of 84 cents as the asset manager's latest market update on funds under management (December) revealed more outflows and weak returns.
A new CEO is taking charge, the broker reminds investors.
Comments the broker: "We don’t know whether the new CEO has a mandate to sell or fix the business. We suspect the latter."
The shares rallied in December, but Bell Potter remains undeterred: too early to call a successful turnaround.
This research was released yesterday.
Target price is $0.84 Current Price is $1.22 Difference: minus $0.38 (current price is over target).
If PTM meets the Bell Potter target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $1.28, suggesting upside of 6.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 9.00 cents and EPS of 9.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.8, implying annual growth of -16.3%. Current consensus DPS estimate is 11.6, implying a prospective dividend yield of 9.7%. Current consensus EPS estimate suggests the PER is 10.2. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 8.00 cents and EPS of 7.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 10.4, implying annual growth of -11.9%. Current consensus DPS estimate is 9.8, implying a prospective dividend yield of 8.2%. Current consensus EPS estimate suggests the PER is 11.5. |
Market Sentiment: -0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $0.96
Macquarie rates WAF as Outperform (1) -
Outperform rating and target price of $1.60 retained after West African Resources released better-than-expected production and sales data through its Q4 market update yesterday.
The analyst remarks AISC is currently tracking below management's guidance for the year (positive if sustained).
Macquarie points out the company intends to inform the market with an updated 10-year outlook shortly, accompanied by 2024 cost and production guidances.
No need to emphasise, both releases are potential catalysts for the share price.
Target price is $1.60 Current Price is $0.96 Difference: $0.645
If WAF meets the Macquarie target it will return approximately 68% (excluding dividends, fees and charges).
The company's fiscal year ends in December.
Forecast for FY23:
Macquarie forecasts a full year FY23 dividend of 0.00 cents and EPS of 14.70 cents. |
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of 16.10 cents. |
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 | |
| AWC | Alumina Ltd | $1.13 | Citi | 1.15 | 1.10 | 4.55% |
| DLI | Delta Lithium | $0.33 | Bell Potter | 0.75 | 1.35 | -44.44% |
| GSS | Genetic Signatures | $0.50 | Bell Potter | 0.80 | 0.83 | -3.61% |
| LYC | Lynas Rare Earths | $6.38 | Bell Potter | 8.50 | 8.80 | -3.41% |
Summaries
| AWC | Alumina Ltd | Downgrade to Neutral from Buy - Citi | Overnight Price $1.15 |
| DLI | Delta Lithium | Speculative Buy - Bell Potter | Overnight Price $0.34 |
| GSS | Genetic Signatures | Speculative Buy - Bell Potter | Overnight Price $0.44 |
| HUB | Hub24 | Initiation of coverage with Overweight - Morgan Stanley | Overnight Price $35.94 |
| LYC | Lynas Rare Earths | Buy - Bell Potter | Overnight Price $6.27 |
| NWL | Netwealth Group | Initiation of coverage with Overweight - Morgan Stanley | Overnight Price $15.62 |
| PTM | Platinum Asset Management | Sell - Bell Potter | Overnight Price $1.22 |
| WAF | West African Resources | Outperform - Macquarie | Overnight Price $0.96 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 6 |
| 3. Hold | 1 |
| 5. Sell | 1 |
Thursday 11 January 2024
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