Australian Broker Call
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September 11, 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). Stocks highlighted in RED have seen additional reporting since the prior update of this Report.
Last Updated: 03:32 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
ACF ACROW FORMWORK AND CONSTRUCTION SERVICES LIMITED
Building Products & Services
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Overnight Price: $0.88
Shaw and Partners rates ACF as Buy (1) -
Shaw and Partners transfers coverage to a new analyst, maintaining a Buy rating and $1.15 target for Acrow Formwork and Construction Services.
The broker remains attracted to the stock given the quality of its management and strong outlook for the sectors in which it operates, particularly engineering and transport infrastructure.
Progress has been made on several fronts driving earnings momentum, margin improvements and an increase in returns on equity. The company has guided to FY24 revenue in a range of $190-200m and EBITDA of $67-70m, reflecting growth of around 16% and 29%, respectively.
Target price is $1.15 Current Price is $0.88 Difference: $0.27
If ACF meets the Shaw and Partners target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $1.09, suggesting upside of 22.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Shaw and Partners forecasts a full year FY24 dividend of 4.70 cents and EPS of 11.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 11.4, implying annual growth of 27.2%. Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 5.3%. Current consensus EPS estimate suggests the PER is 7.8. |
Forecast for FY25:
Shaw and Partners forecasts a full year FY25 dividend of 5.20 cents and EPS of 12.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 12.3, implying annual growth of 7.9%. Current consensus DPS estimate is 5.4, implying a prospective dividend yield of 6.1%. Current consensus EPS estimate suggests the PER is 7.2. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
CAR CARSALES.COM LIMITED
Online media & mobile platforms
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Overnight Price: $28.81
Citi rates CAR as Buy (1) -
Citi observes dealer numbers continue to grow at Trader Interactive, supported by growth in Powersports dealers. RVTrader listings increased month on month as of September 1, although the broker notes they continue to be down year-on-year.
Citi's US RV analyst assesses there is a slight improvement in demand, and sales improved sequentially in July. Dealers are having to work harder, which the broker believes is positive for RVTrader. Buy rating and $29.65 target retained for Carsales.
Target price is $29.65 Current Price is $29.96 Difference: minus $0.31 (current price is over target).
If CAR meets the Citi target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $28.14, suggesting downside of -5.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 69.80 cents and EPS of 89.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 82.8, implying annual growth of -54.3%. Current consensus DPS estimate is 66.2, implying a prospective dividend yield of 2.2%. Current consensus EPS estimate suggests the PER is 36.0. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 79.90 cents and EPS of 102.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 94.7, implying annual growth of 14.4%. Current consensus DPS estimate is 75.5, implying a prospective dividend yield of 2.5%. Current consensus EPS estimate suggests the PER is 31.4. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.23
Bell Potter rates CMM as Buy (1) -
Bell Potter observes the FY23 results from Capricorn Metals were distorted by the accounting treatment of the partial hedge book buyback. This removed all hedging obligations until September 2024. EBITDA beat forecasts because of lower cost of sales and lower costs at the Mount Gibson development project.
A final investment decision for Mount Gibson is now likely in the first half of 2024 and, with a favourable outlook for the gold price, Bell Potter believes this is a good use of capital and will appeal to shareholders looking for exposure to upside in the gold price. Buy rating retained. Target edges up to $5.20 from $5.19.
Target price is $5.20 Current Price is $4.27 Difference: $0.93
If CMM meets the Bell Potter target it will return approximately 22% (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 29.40 cents. |
Forecast for FY25:
Bell Potter forecasts a full year FY25 dividend of 0.00 cents and EPS of 24.80 cents. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates CMM as Neutral (3) -
Underlying FY23 results were in line with Macquarie's estimates. Net profit was materially lower-than-expected because of one-offs.
Capricorn Metals posted closing net cash of $15m, almost double what Macquarie had expected and this was because of a lower-than- expected closing lease balance.
The company has retained FY24 guidance of 115-125,000 ounces at an AISC of $1270-1370/oz. The broker maintains a Neutral rating and $4.80 target.
Target price is $4.80 Current Price is $4.27 Difference: $0.53
If CMM meets the Macquarie target it will return approximately 12% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY24:
Macquarie forecasts a full year FY24 dividend of 0.00 cents and EPS of 29.10 cents. |
Forecast for FY25:
Macquarie forecasts a full year FY25 dividend of 3.00 cents and EPS of 22.70 cents. |
Market Sentiment: 0.5
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: $53.19
Citi rates DMP as Neutral (3) -
Citi analyses web traffic data which suggests continued weakness in Japan and Taiwan. Therefore Domino's Pizza Enterprises probably has more work to do in these regions to rebuild orders.
The initial strategies to combat inflation had suboptimal results in customer volumes, the broker points out, although new strategies such as My Domino's Box and loaded fries appear to be more successful.
Citi assesses the business needs to significantly increase the pace of new store openings to meet its targets and this will likely rely on the willingness and ability of franchisees to invest. Neutral rating and $57.95 target retained.
Target price is $57.95 Current Price is $53.41 Difference: $4.54
If DMP meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $57.33, suggesting upside of 7.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 106.30 cents and EPS of 169.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 174.6, implying annual growth of 278.7%. Current consensus DPS estimate is 129.7, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 30.6. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 151.20 cents and EPS of 231.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 218.0, implying annual growth of 24.9%. Current consensus DPS estimate is 160.8, implying a prospective dividend yield of 3.0%. Current consensus EPS estimate suggests the PER is 24.5. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.68
Citi rates MTS as Neutral (3) -
Metcash has released an AGM update to the ASX, which also includes a trading update for the first 18 weeks of FY24.
Citi, in a quick response, highlights today's release signals independent supermarkets continue to lose market share, while hardware sales have slowed since the last prior update.
Liqour sales momentum seems to have slightly improved with the analysts highlighting on-premise spending is in decline. Relative to the broker's forecasts, both Hardware and Liquor are performing somewhat better, with Food in line.
Citi remains Neutral-rated with a price target of $4.
Target price is $4.00 Current Price is $3.72 Difference: $0.28
If MTS meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $4.10, suggesting upside of 10.5% (ex-dividends)
The company's fiscal year ends in April.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 20.00 cents and EPS of 29.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 30.5, implying annual growth of 13.7%. Current consensus DPS estimate is 21.1, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 12.2. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 22.00 cents and EPS of 29.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 29.9, implying annual growth of -2.0%. Current consensus DPS estimate is 21.2, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 12.4. |
Market Sentiment: 0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.61
Morgans rates RRL as Add (1) -
Regis Resources remains Morgans' top pick amongst its gold coverage. After analysing the industry the broker notes large cap gold producers are continuing to seek copper exposure in order to lower costs and pursue an "all-weather portfolio strategy".
A stabilising of interest rates is likely to drive gold prices higher in FY24, the broker adds, while decoupling of the US dollar will drive robust demand by central banks and investors seeking to hedge risk against an uncertain future.
Regis Resources has foundations in place for a strong FY24 and FY25 as it reduces capital intensity and transitions to a "cash harvesting phase", Morgans asserts. Add rating and $1.74 target.
Target price is $1.74 Current Price is $1.62 Difference: $0.12
If RRL meets the Morgans target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $1.84, suggesting upside of 12.3% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Morgans forecasts a full year FY24 dividend of 0.00 cents and EPS of 20.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.3, implying annual growth of N/A. Current consensus DPS estimate is 0.3, implying a prospective dividend yield of 0.2%. Current consensus EPS estimate suggests the PER is 38.1. |
Forecast for FY25:
Morgans forecasts a full year FY25 dividend of 0.00 cents and EPS of 22.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 17.0, implying annual growth of 295.3%. Current consensus DPS estimate is 0.2, implying a prospective dividend yield of 0.1%. Current consensus EPS estimate suggests the PER is 9.6. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $15.43
Citi rates SGM as Sell (5) -
Sims' market update, released this morning, is effectively an unquantified profit warning, with the scrap king reporting conditions globally have remained weak and they are weakening in the US.
Sims expects to be around EBIT break-even in Q1 FY24. Citi retains its Sell rating, alongside a price target of $15.00.
Target price is $15.00 Current Price is $13.79 Difference: $1.21
If SGM meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).
Current consensus price target is $13.53, suggesting downside of -4.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY24:
Citi forecasts a full year FY24 dividend of 30.00 cents and EPS of 64.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 42.3, implying annual growth of -54.8%. Current consensus DPS estimate is 29.0, implying a prospective dividend yield of 2.1%. Current consensus EPS estimate suggests the PER is 33.4. |
Forecast for FY25:
Citi forecasts a full year FY25 dividend of 37.00 cents and EPS of 107.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 120.9, implying annual growth of 185.8%. Current consensus DPS estimate is 48.8, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 11.7. |
Market Sentiment: -0.3
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $4.93
Ord Minnett rates UMG as Hold (3) -
Ord Minnett recommends shareholders vote in favour of Malteries Soufflet's proposed takeover of United Malt as it considers this a "great outcome" for investors.
The $5 offer is a 45% premium to the share price prior to the indicative proposal being announced in March and a 25% premium to the broker's stand-alone valuation.
The scheme meeting is scheduled for October 12, 2023 and, if it proceeds, the shares will be suspended from trading at the close on October 17, 2023. Hold rating and $5 target.
Target price is $5.00 Current Price is $4.93 Difference: $0.07
If UMG meets the Ord Minnett target it will return approximately 1% (excluding dividends, fees and charges).
Current consensus price target is $5.00, suggesting upside of 1.0% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY23:
Ord Minnett forecasts a full year FY23 dividend of 7.00 cents and EPS of 12.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 7.5, implying annual growth of 93.3%. Current consensus DPS estimate is 2.7, implying a prospective dividend yield of 0.5%. Current consensus EPS estimate suggests the PER is 66.0. |
Forecast for FY24:
Ord Minnett forecasts a full year FY24 dividend of 14.00 cents and EPS of 24.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 19.5, implying annual growth of 160.0%. Current consensus DPS estimate is 9.4, implying a prospective dividend yield of 1.9%. Current consensus EPS estimate suggests the PER is 25.4. |
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 | |
| CMM | Capricorn Metals | $4.38 | Bell Potter | 5.20 | 5.19 | 0.19% |
| DMP | Domino's Pizza Enterprises | $53.50 | Citi | 57.95 | 40.00 | 44.88% |
Summaries
| ACF | Acrow Formwork and Construction Services | Buy - Shaw and Partners | Overnight Price $0.88 |
| CAR | Carsales | Buy - Citi | Overnight Price $28.81 |
| CMM | Capricorn Metals | Buy - Bell Potter | Overnight Price $4.23 |
| Neutral - Macquarie | Overnight Price $4.23 | ||
| DMP | Domino's Pizza Enterprises | Neutral - Citi | Overnight Price $53.19 |
| MTS | Metcash | Neutral - Citi | Overnight Price $3.68 |
| RRL | Regis Resources | Add - Morgans | Overnight Price $1.61 |
| SGM | Sims | Sell - Citi | Overnight Price $15.43 |
| UMG | United Malt | Hold - Ord Minnett | Overnight Price $4.93 |
RATING SUMMARY
| Rating | No. Of Recommendations |
| 1. Buy | 4 |
| 3. Hold | 4 |
| 5. Sell | 1 |
Friday 15 September 2023
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