Australian Broker Call
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October 05, 2020
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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
| HUB - | HUB24 | Downgrade to Underperform from Neutral | Credit Suisse |
| NVX - | Novonix | Upgrade to Add from Hold | Morgans |
| PTM - | Platinum Asset Management | Upgrade to Neutral from Underperform | Credit Suisse |
BRG BREVILLE GROUP LIMITED
Household & Personal Products
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Overnight Price: $25.73
UBS rates BRG as Buy (1) -
Breville Group acquired the Seattle-based coffee grinding company - Baratza - for US$60m. UBS estimates the deal could be circa 3% earnings per share accretive.
The broker highlights this purchase is similar to other bolt-on acquisitions made by the group in recent years. Further M&A is seen as a medium-term source of upside for Breville Group.
UBS maintains its Buy rating with the target raised to $29.90 from $29.50.
Target price is $29.90 Current Price is $25.73 Difference: $4.17
If BRG meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $26.86, suggesting upside of 2.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 39.50 cents and EPS of 63.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 63.6, implying annual growth of 25.9%. Current consensus DPS estimate is 43.5, implying a prospective dividend yield of 1.7%. Current consensus EPS estimate suggests the PER is 41.2. |
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 46.90 cents and EPS of 74.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 71.6, implying annual growth of 12.6%. Current consensus DPS estimate is 49.1, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 36.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.36
UBS rates CGC as Buy (1) -
UBS reports strong wholesale pricing trends in the third quarter for Costa Group Holdings. Overall the broker's forecasts remain unchanged, but there is more confidence in a recovery in the second half.
UBS likes Costa Group because of the group's improving earnings outlook underpinned by strong near-term grocery demand, more normal supply, growth projects, and an attractive valuation.
Buy rating is retained with the target price unchanged at $3.55.
Target price is $3.55 Current Price is $3.36 Difference: $0.19
If CGC meets the UBS target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $3.63, suggesting upside of 4.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 8.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.2, implying annual growth of N/A. Current consensus DPS estimate is 7.4, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 31.0. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 11.00 cents and EPS of 18.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.0, implying annual growth of 51.8%. Current consensus DPS estimate is 9.9, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 20.4. |
Market Sentiment: 0.8
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: $284.67
UBS rates CSL as Buy (1) -
The US's Plasma Protein Therapeutics Association's monthly data show for the month of June immunoglobulin volumes grew at a record 19.5% (12-month rolling basis) while albumin sales struggled.
The inability to catch public transport to plasma centres has been a factor in the decline in donor attendance, explains UBS. Looking at CSL's plasma collection centre locations, UBS estimates transit activity is down circa -15% versus last year in September.
The broker forecasts a -20% decline in plasma collection in the April-Sep period with recovery thereafter.
Buy rating and $346 target retained.
Target price is $346.00 Current Price is $284.67 Difference: $61.33
If CSL meets the UBS target it will return approximately 22% (excluding dividends, fees and charges).
Current consensus price target is $310.39, suggesting upside of 7.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 303.21 cents and EPS of 712.39 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 692.6, implying annual growth of N/A. Current consensus DPS estimate is 303.9, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 41.7. |
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 362.08 cents and EPS of 818.37 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 782.3, implying annual growth of 13.0%. Current consensus DPS estimate is 345.5, implying a prospective dividend yield of 1.2%. Current consensus EPS estimate suggests the PER is 36.9. |
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
CTD CORPORATE TRAVEL MANAGEMENT LIMITED
Travel, Leisure & Tourism
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Overnight Price: $17.04
Morgans rates CTD as No Rating (-1) -
Morgans is restricted on a rating and target at present.
Current Price is $17.04. Target price not assessed.
Current consensus price target is $16.63, suggesting downside of -3.4% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 6.6, implying annual growth of N/A. Current consensus DPS estimate is 2.0, implying a prospective dividend yield of 0.1%. Current consensus EPS estimate suggests the PER is 260.8. |
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 0.00 cents and EPS of 66.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 54.4, implying annual growth of 724.2%. Current consensus DPS estimate is 13.4, implying a prospective dividend yield of 0.8%. Current consensus EPS estimate suggests the PER is 31.6. |
Market Sentiment: 0.7
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: $17.84
Credit Suisse rates HUB as Downgrade to Underperform from Neutral (5) -
Following the outperformance over the past quarter, Credit Suisse downgrades to Underperform from Neutral. HUB24 may be executing on its strategy, and industry dynamics are in its favour, but this is considered more than factored into the current valuation.
There is now also downside risk to earnings if the Reserve Bank of Australia cuts official rates, Credit Suisse suggests. Target is steady at $16.30.
Target price is $16.30 Current Price is $17.84 Difference: minus $1.54 (current price is over target).
If HUB meets the Credit Suisse target it will return approximately minus 9% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $16.21, suggesting downside of -6.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 11.00 cents and EPS of 25.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.4, implying annual growth of 121.1%. Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 0.7%. Current consensus EPS estimate suggests the PER is 59.1. |
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 15.00 cents and EPS of 35.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 40.7, implying annual growth of 38.4%. Current consensus DPS estimate is 19.0, implying a prospective dividend yield of 1.1%. Current consensus EPS estimate suggests the PER is 42.7. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.01
Morgans rates NVX as Upgrade to Add from Hold (1) -
As the share price has softened, Morgans upgrades to Speculative Buy from Hold, retaining a $1.33 target. The company is expecting first delivery of mass produced anode material in April 2021 under its contract with Samsung.
By the end of FY21 Novonix is aiming for production capacity of 1000tpa and intends to double that by the end of 2021.
Morgans estimates the company will need to spend -$24m to complete its phase 1 expansion and fund the dry particle micro granulation (DPMG) technology and pilot plant. Still, Novonix appears well funded to complete its first growth target.
Target price is $1.33 Current Price is $1.01 Difference: $0.32
If NVX meets the Morgans target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.00 cents. |
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 0.00 cents and EPS of 0.00 cents. |
Market Sentiment: 1.0
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
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Overnight Price: $3.16
Credit Suisse rates PTM as Upgrade to Neutral from Underperform (3) -
Sizeable outflows have already been factored into forecasts, Credit Suisse asserts, and the stock is trading at trough multiples. Amid more limited downside, the broker upgrades to Neutral from Underperform.
Moreover, there is upside in Credit Suisse's view if the Asia Fund performance improvement attracts funds from offshore markets. Target is steady at $3.30.
Target price is $3.30 Current Price is $3.16 Difference: $0.14
If PTM meets the Credit Suisse target it will return approximately 4% (excluding dividends, fees and charges).
Current consensus price target is $3.19, suggesting downside of -2.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 22.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.5, implying annual growth of -19.7%. Current consensus DPS estimate is 21.5, implying a prospective dividend yield of 6.6%. Current consensus EPS estimate suggests the PER is 15.3. |
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 22.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 21.1, implying annual growth of -1.9%. Current consensus DPS estimate is 21.3, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 15.5. |
Market Sentiment: -0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.46
UBS rates SHV as Buy (1) -
Select Harvests will be acquiring the Piangil Almond Orchard at a price of -$129m. The acquisition will be funded by a mix of capital raising and debt.
The broker expects the acquisition to be low-mid single-digit earnings per share accretive (FY22-basis) and is expected to add 20% to Select Harvest's FY20 estimated volume.
Buy rating retained. Target is unchanged at $7.75.
Target price is $7.75 Current Price is $5.46 Difference: $2.29
If SHV meets the UBS target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in September.
Forecast for FY20:
UBS forecasts a full year FY20 dividend of 19.00 cents and EPS of 24.10 cents. |
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 24.00 cents and EPS of 38.10 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 | |
| AMP | AMP Ltd | $1.37 | Credit Suisse | 1.78 | 1.90 | -6.32% |
| BRG | Breville Group | $26.23 | UBS | 29.90 | 29.50 | 1.36% |
| CTD | Corporate Travel | $17.21 | Morgans | N/A | 14.20 | -100.00% |
| NWL | Netwealth Group | $15.67 | Credit Suisse | 14.75 | 14.00 | 5.36% |
| PDL | Pendal Group | $5.56 | Credit Suisse | 5.80 | 6.30 | -7.94% |
| PPT | Perpetual | $29.27 | Credit Suisse | 31.00 | 35.00 | -11.43% |
Summaries
| BRG | Breville Group | Buy - UBS | Overnight Price $25.73 |
| CGC | Costa Group | Buy - UBS | Overnight Price $3.36 |
| CSL | CSL | Buy - UBS | Overnight Price $284.67 |
| CTD | Corporate Travel | No Rating - Morgans | Overnight Price $17.04 |
| HUB | HUB24 | Downgrade to Underperform from Neutral - Credit Suisse | Overnight Price $17.84 |
| NVX | Novonix | Upgrade to Add from Hold - Morgans | Overnight Price $1.01 |
| PTM | Platinum Asset Management | Upgrade to Neutral from Underperform - Credit Suisse | Overnight Price $3.16 |
| SHV | Select Harvests | Buy - UBS | Overnight Price $5.46 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 5 |
| 3. Hold | 1 |
| 5. Sell | 1 |
Monday 05 October 2020
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