Australian Broker Call
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June 17, 2021
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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.
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Today's Upgrades and Downgrades
CSL - | CSL | Downgrade to Neutral from Outperform | Macquarie |
Overnight Price: $0.80
Morgans rates AMX as Add (1) -
While the recent trading update was pretty much as expected by Morgans, the broker also notes company management is now noticing competitive pressure.
As a direct result of the latter, management is now guiding annual recurring revenues (ARR) to be only slightly above the $4.26m seen at 31 March.
Morgans sticks with its view Aerometrex's core MetroMap product continues to enjoy a long growth runway ahead, with a large addressable market.
Forecasts have been reduced, which also pulls back the price target to $1.36 from $1.61. Add rating retained, for the patient investor, as Morgans puts it.
Target price is $1.36 Current Price is $0.80 Difference: $0.56
If AMX meets the Morgans target it will return approximately 70% (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 4.00 cents. |
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 3.00 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $3.94
Macquarie rates CQR as Outperform (1) -
Charter Hall Retail REIT has increased its asset valuations by 4.1%, which net of capex implies a 5.2% increase to net tangible asset value, the broker notes.
While the REIT now has limited balance sheet capacity, it is offering a 6.5% yield and is trading roughly at its NTA. The broker sees upside risk to shopping centre valuations and retains Outperform. Target rises to $4.18 from $4.04.
Target price is $4.18 Current Price is $3.94 Difference: $0.24
If CQR meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $3.72, suggesting downside of -2.8% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 23.40 cents and EPS of 26.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 26.8, implying annual growth of 183.3%. Current consensus DPS estimate is 23.0, implying a prospective dividend yield of 6.0%. Current consensus EPS estimate suggests the PER is 14.3. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 25.60 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 27.8, implying annual growth of 3.7%. Current consensus DPS estimate is 24.9, implying a prospective dividend yield of 6.5%. Current consensus EPS estimate suggests the PER is 13.8. |
Market Sentiment: 0.3
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: $302.90
Macquarie rates CSL as Downgrade to Neutral from Outperform (3) -
Foot traffic at CSL's US collection centres continues to increase, but the pace has slowed somewhat from the burst in April/May, Macquarie notes. Consensus earnings forecasts have risen modestly, while CSL has outperformed the index by 7%.
This implies a level PE multiple expansion that the broker finds stretched. On a forecast total shareholder return now of only 4.4%, Macquarie pulls back to Neutral from Outperform. Target unchanged at $312.
Target price is $312.00 Current Price is $302.90 Difference: $9.1
If CSL meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $300.19, suggesting downside of -0.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 305.40 cents and EPS of 683.32 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 652.8, implying annual growth of N/A. Current consensus DPS estimate is 259.7, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 46.3. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 317.62 cents and EPS of 704.67 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 637.9, implying annual growth of -2.3%. Current consensus DPS estimate is 281.3, implying a prospective dividend yield of 0.9%. Current consensus EPS estimate suggests the PER is 47.4. |
This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $30.55
Macquarie rates EBO as Neutral (3) -
The broker sees Ebos Group's operational momentum as on balance positive, but takes issue with the current price. From here, it is difficult to see what might lead either to a re-rating or de-rating.
The stock currently trades on an 18x forward EBIT forecast, which is close to all-time highs, but is offering only a 4.1% free cash flow yield, the broker notes, compared to a 5.1% average among A&NZ peers.
Target rises to NZ$33.70 from US$29.53, Neutral retained.
Current Price is $30.55. Target price not assessed.
Current consensus price target is $28.87, suggesting downside of -5.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 82.20 cents and EPS of 114.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 113.7, implying annual growth of 13.0%. Current consensus DPS estimate is 72.7, implying a prospective dividend yield of 2.4%. Current consensus EPS estimate suggests the PER is 26.9. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 95.20 cents and EPS of 123.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 123.9, implying annual growth of 9.0%. Current consensus DPS estimate is 79.7, implying a prospective dividend yield of 2.6%. Current consensus EPS estimate suggests the PER is 24.7. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $11.89
Macquarie rates ELD as Outperform (1) -
ABARES has increased its FY21 farm production value forecast by 0.6% from the March forecast, to a record $66.2bn, expecting strong seasonal conditions in both FY21 and FY22. A 2.7% increase to the FY22 forecast is nevertheless a little down on FY21.
Such conditions will support Elders' earnings but the company also has other levers to pull, the broker notes, such as bolt-on acquisitions and footprint expansion. Outperform retained, target slips to $13.96 from $14.11.
Target price is $13.96 Current Price is $11.89 Difference: $2.07
If ELD meets the Macquarie target it will return approximately 17% (excluding dividends, fees and charges).
Current consensus price target is $13.10, suggesting upside of 11.2% (ex-dividends)
The company's fiscal year ends in September.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 43.40 cents and EPS of 89.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.0, implying annual growth of 9.0%. Current consensus DPS estimate is 41.1, implying a prospective dividend yield of 3.5%. Current consensus EPS estimate suggests the PER is 13.5. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 45.90 cents and EPS of 91.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 92.1, implying annual growth of 5.9%. Current consensus DPS estimate is 45.0, implying a prospective dividend yield of 3.8%. Current consensus EPS estimate suggests the PER is 12.8. |
Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $1.47
Morgans rates HDN as Add (1) -
HomeCo Daily Needs REIT's security holders have approved the purchase of large format retail (LFR) centres for $266.4m, implying a 6.75% cap rate. Settlement is expected in July 2021. The seller is Home Consortium ((HMC)).
In addition, the broker notes HomeCo Daily Needs REIT recently announced preliminary positive June 2021 asset revaluations of 6.5%.
Morgans believes the REIT offers an attractive dividend profile. Add rating retained, as well as the $1.50 price target.
Target price is $1.50 Current Price is $1.47 Difference: $0.03
If HDN meets the Morgans target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $1.45, suggesting downside of -0.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 4.20 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.0, implying annual growth of N/A. Current consensus DPS estimate is 4.2, implying a prospective dividend yield of 2.9%. Current consensus EPS estimate suggests the PER is 36.5. |
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 8.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 8.2, implying annual growth of 105.0%. Current consensus DPS estimate is 8.0, implying a prospective dividend yield of 5.5%. Current consensus EPS estimate suggests the PER is 17.8. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $5.17
Credit Suisse rates IAG as Outperform (1) -
Insurance Australia Group has estimated natural perils claims will be $720-743m for FY21. The upper end of this range represents the stock-loss protection limit for the maximum net perils cost post quota share.
Credit Suisse increases perils expenses modestly and as a result downgrades FY21 cash estimates for earnings per share by -4%.
The broker continues to believe the stock offers value at current levels, with conservative provisions factored into earnings and tailwinds from a hardening insurance cycle. Outperform rating reiterated. Target is $5.35.
Target price is $5.35 Current Price is $5.17 Difference: $0.18
If IAG meets the Credit Suisse target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $5.41, suggesting upside of 3.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 19.00 cents and EPS of minus 6.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.9, implying annual growth of -15.3%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 32.9. |
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 18.00 cents and EPS of 26.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.0, implying annual growth of 76.1%. Current consensus DPS estimate is 22.8, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.7. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates IAG as Accumulate (2) -
Insurance Australia Group now estimates its FY21 net peril claims will amount to $720-743m as a result of the Victorian floods, compared with previously restated guidance of $660-700m.
Ord Minnett updates forecasts accordingly and also incorporates a slight increase in reserve releases assumptions. The broker maintains an Accumulate rating and raises the target to $5.30 from $5.15.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $5.30 Current Price is $5.17 Difference: $0.13
If IAG meets the Ord Minnett target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $5.41, suggesting upside of 3.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 17.00 cents and EPS of 27.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.9, implying annual growth of -15.3%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 32.9. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 25.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.0, implying annual growth of 76.1%. Current consensus DPS estimate is 22.8, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.7. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
UBS rates IAG as Buy (1) -
Insurance Australia Group has increased its FY21 natural peril cost estimate to $720-743m. As estimates assume the stop-loss protection is fully utilised, UBS assesses downside risk if there are any large events for the remaining two weeks of FY21.
With the stop-loss not likely to be renewed into FY22, the broker expects the company will face a sharp increase in its natural perils budget next year. Buy rating and $6 target retained.
Target price is $6.00 Current Price is $5.17 Difference: $0.83
If IAG meets the UBS target it will return approximately 16% (excluding dividends, fees and charges).
Current consensus price target is $5.41, suggesting upside of 3.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
UBS forecasts a full year FY21 dividend of 17.00 cents and EPS of 31.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.9, implying annual growth of -15.3%. Current consensus DPS estimate is 19.1, implying a prospective dividend yield of 3.7%. Current consensus EPS estimate suggests the PER is 32.9. |
Forecast for FY22:
UBS forecasts a full year FY22 dividend of 19.00 cents and EPS of 28.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 28.0, implying annual growth of 76.1%. Current consensus DPS estimate is 22.8, implying a prospective dividend yield of 4.4%. Current consensus EPS estimate suggests the PER is 18.7. |
Market Sentiment: 0.6
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $12.36
Macquarie rates LLC as Neutral (3) -
A recent Lendlease board presentation included a change of commentary, the broker suggests, with documents signalling a potential cost-out opportunity. Every -1% reduction in costs translates to around a 2.5% earnings uplift in FY23 earnings forecasts.
This would support return on invested capital targets, and is earnings positive in isolation, but for the broker, a sustained re-rate of the stock would require actual revenue growth. Neutral and $12.99 target retained.
Target price is $12.99 Current Price is $12.36 Difference: $0.63
If LLC meets the Macquarie target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $13.84, suggesting upside of 12.1% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 33.40 cents and EPS of 66.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 67.4, implying annual growth of N/A. Current consensus DPS estimate is 33.4, implying a prospective dividend yield of 2.7%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 40.70 cents and EPS of 81.40 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 87.7, implying annual growth of 30.1%. Current consensus DPS estimate is 42.4, implying a prospective dividend yield of 3.4%. Current consensus EPS estimate suggests the PER is 14.1. |
Market Sentiment: 0.5
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MAH MACMAHON HOLDINGS LIMITED
Mining Sector Contracting
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Overnight Price: $0.19
Macquarie rates MAH as Initiation of coverage with Outperform (1) -
The broker has "initiated" coverage of mining service provider Macmahon Holdings, having previously abandoned coverage in 2015. An Outperform rating and 30c target reflect increased gold activity in Australia and copper in Indonesia.
Presently, Macmahon is underpinned by the Batu Hijau copper project in Indonesia, the broker notes, with revenue and margin growth expected to come from an increase in underground contracts.
Near term risks include covid restrictions and wage inflation.
Target price is $0.30 Current Price is $0.19 Difference: $0.11
If MAH meets the Macquarie target it will return approximately 58% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 0.70 cents and EPS of 3.40 cents. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 0.60 cents and EPS of 2.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
MAI MAINSTREAM GROUP HOLDINGS LIMITED
Diversified Financials
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Overnight Price: $2.84
Ord Minnett rates MAI as Hold (3) -
Ord Minnett notes competing takeover proposals now number 15 from at least three different parties over the last four months.
The latest is Apex Group at $2.80 a share with SS&C Technologies, which offered $2.76 on June 1, having until June 17 to match the proposal.
The broker increases the target to $2.80 from $2.35 to reflect the current offer and believes material upside for shareholders is unlikely at this point. Hold maintained.
Target price is $2.80 Current Price is $2.84 Difference: minus $0.04 (current price is over target).
If MAI meets the Ord Minnett target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).
The company's fiscal year ends in June.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 1.00 cents and EPS of 2.10 cents. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 3.00 cents and EPS of 5.70 cents. |
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
NWH NRW HOLDINGS LIMITED
Mining Sector Contracting
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Overnight Price: $1.50
Macquarie rates NWH as Initiation of coverage with Outperform (1) -
The broker has "initiated" coverage of mining service provider NRW Holdings, having previously abandoned coverage in 2015. An Outperform rating and $2.10 target reflect the benefits of converting a $14bn order book to secured work.
NRW is highly leveraged to increased spending on iron ore production and infrastructure in general, the broker notes, both of which have significant tailwinds.
Near term risks include covid restrictions and wage inflation.
Target price is $2.10 Current Price is $1.50 Difference: $0.6
If NWH meets the Macquarie target it will return approximately 40% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 7.00 cents and EPS of 13.70 cents. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 7.00 cents and EPS of 20.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $2.60
Morgan Stanley rates NXL as Overweight (1) -
Morgan Stanley notes the company is in the highly unusual position of having its chief financial officer departing at the same time the CEO is retiring. In addition, the company is also hiring a chief operating officer and internal investor relations personnel.
The broker believes these are constructive steps and necessary to rebuild confidence but at the same time it will contribute to an elevated risk profile.
The broker remains positive on the business outlook yet expects the shares will continue to trade at a discount until investor confidence is restored. Overweight rating and $6.40 target maintained. Industry view is Attractive.
Target price is $6.40 Current Price is $2.60 Difference: $3.8
If NXL meets the Morgan Stanley target it will return approximately 146% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of 6.40 cents. |
Forecast for FY22:
Morgan Stanley forecasts a full year FY22 dividend of 0.00 cents and EPS of 8.10 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PPS PRAEMIUM LIMITED
Wealth Management & Investments
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Overnight Price: $0.95
Ord Minnett rates PPS as Buy (1) -
Ord Minnett changes its valuation approach for Praemium because of changing industry dynamics. The broker moves to a sum-of-the-parts methodology to better reflect value across various parts of the business.
While neither Powerwrap nor the international business are profitable both have improving opportunities from ongoing investment.
Ord Minnett retains a Buy rating and raises the target to $1.35 from $1.00.
Target price is $1.35 Current Price is $0.95 Difference: $0.4
If PPS meets the Ord Minnett target it will return approximately 42% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 0.00 cents and EPS of 1.10 cents. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 0.00 cents and EPS of 1.80 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
PRN PERENTI GLOBAL LIMITED
Mining Sector Contracting
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Overnight Price: $0.68
Macquarie rates PRN as Initiation of coverage with Outperform (1) -
The broker has initiated coverage of mining service provider Perenti Global. An Outperform rating and 90c target reflect a shift in work away from riskier African nations to less risky Botswana, as well as North America.
Perenti has significant levels of work in hand and a large order book, the broker notes, which should support cash flow and attractive 9-10% dividend yields.
Near term risks include covid restrictions and wage inflation.
Target price is $0.90 Current Price is $0.68 Difference: $0.22
If PRN meets the Macquarie target it will return approximately 32% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 6.50 cents and EPS of 7.10 cents. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 6.00 cents and EPS of 6.30 cents. |
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SCP SHOPPING CENTRES AUSTRALASIA PROPERTY GROUP RE LIMITED
REITs
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Overnight Price: $2.59
Credit Suisse rates SCP as Neutral (3) -
The company has acquired Marketown, Newcastle, for $150.5m on an initial passing yield of 5.6%. The centre has an east wing anchored by Woolworths ((WOW)) and a west wing anchored by Coles ((COL)).
Credit Suisse estimates gearing is now around 33% and from now on any material acquisitions could require additional equity.
The broker revises FY22 and FY23 estimates up to reflect the Marketown and Raymond Terrace acquisitions. Neutral maintained. Target rises to $2.54 from $2.50.
Target price is $2.54 Current Price is $2.59 Difference: minus $0.05 (current price is over target).
If SCP meets the Credit Suisse target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).
Current consensus price target is $2.46, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Credit Suisse forecasts a full year FY21 dividend of 12.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.9, implying annual growth of 56.2%. Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY22:
Credit Suisse forecasts a full year FY22 dividend of 15.00 cents and EPS of 17.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.8, implying annual growth of 13.7%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 16.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Macquarie rates SCP as Outperform (1) -
Shopping Centres Group has acquired Marketown Newcastle for $150m, which implies a 6.1% cap rate, the broker calculates. Recent acquisitions have increased the broker's FY22 funds from operations forecast by some 5%.
The balance sheet is now more limited, with gearing around 33%, but a 6.0% forecast FY22 dividend yield, resilient cash flows and upside risk to asset valuations underpin an Outperform rating. Target rises to $2.68 from $2.56.
Target price is $2.68 Current Price is $2.59 Difference: $0.09
If SCP meets the Macquarie target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $2.46, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 12.30 cents and EPS of 13.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.9, implying annual growth of 56.2%. Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 15.30 cents and EPS of 16.60 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.8, implying annual growth of 13.7%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 16.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Ord Minnett rates SCP as Hold (3) -
The company has acquired Marketown Newcastle for $150.5m, lifting the value of the 2021 acquisitions to $361m at an average yield of 5.9%.
Ord Minnett observes the business has been able to deploy the capacity on the balance sheet and source opportunities at a market price despite increased competition.
The acquisitions are accretive to earnings and lift gearing to 32%, below the stated target of 35%. Hold rating and $2.60 target price are unchanged.
This stock is not covered in-house by Ord Minnett. Instead, the broker whitelabels research by JP Morgan.
Target price is $2.60 Current Price is $2.59 Difference: $0.01
If SCP meets the Ord Minnett target it will return approximately 0% (excluding dividends, fees and charges).
Current consensus price target is $2.46, suggesting downside of -3.7% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Ord Minnett forecasts a full year FY21 dividend of 12.00 cents and EPS of 12.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 13.9, implying annual growth of 56.2%. Current consensus DPS estimate is 12.3, implying a prospective dividend yield of 4.8%. Current consensus EPS estimate suggests the PER is 18.3. |
Forecast for FY22:
Ord Minnett forecasts a full year FY22 dividend of 15.00 cents and EPS of 15.00 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 15.8, implying annual growth of 13.7%. Current consensus DPS estimate is 14.4, implying a prospective dividend yield of 5.6%. Current consensus EPS estimate suggests the PER is 16.1. |
Market Sentiment: 0.2
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Overnight Price: $6.90
Macquarie rates SFR as Outperform (1) -
Sandfire Resources has provided a final resource/reserve upgrade for the ailing DeGrussa mine, ahead of cessation of production in September 2022. Sandfire will run the mine full tilt until the last pound of copper is removed.
The broker thus increases forecast earnings, while at the same time removing the Thaduna project at DeGrussa from valuation. The Old Highway gold project will now be brought online to extend production.
Commencement of the T3 Motheo project in Botswana offers both the next key catalyst, and any delay a key risk. Outperform retained, target falls to $8.90 from $9.30.
Target price is $8.90 Current Price is $6.90 Difference: $2
If SFR meets the Macquarie target it will return approximately 29% (excluding dividends, fees and charges).
Current consensus price target is $7.25, suggesting upside of 7.0% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Macquarie forecasts a full year FY21 dividend of 34.00 cents and EPS of 99.30 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 103.0, implying annual growth of 140.2%. Current consensus DPS estimate is 34.7, implying a prospective dividend yield of 5.1%. Current consensus EPS estimate suggests the PER is 6.6. |
Forecast for FY22:
Macquarie forecasts a full year FY22 dividend of 8.00 cents and EPS of 66.90 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 96.6, implying annual growth of -6.2%. Current consensus DPS estimate is 27.6, implying a prospective dividend yield of 4.1%. Current consensus EPS estimate suggests the PER is 7.0. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
SKI SPARK INFRASTRUCTURE GROUP
Infrastructure & Utilities
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Overnight Price: $2.27
Morgans rates SKI as Add (1) -
Today's update was triggered by the need to update Morgans' modeling to incorporate TransGrid’s Project EnergyConnect. This project is meaningful for TransGrid but a lot less important for Spark Infrastructure, the broker explains.
Having said so, today's update has lifted the broker's target price for Spark by 4c to $2.34. Morgans adds it also supports Spark's narrative regarding de-carbonisation exposure.
Project EnergyConnect is a new 330kV 900km electricity transmission interconnector between SA and NSW. Add rating retained.
Target price is $2.34 Current Price is $2.27 Difference: $0.07
If SKI meets the Morgans target it will return approximately 3% (excluding dividends, fees and charges).
Current consensus price target is $2.30, suggesting upside of 4.5% (ex-dividends)
The company's fiscal year ends in December.
Forecast for FY21:
Morgans forecasts a full year FY21 dividend of 12.50 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 4.5, implying annual growth of -26.2%. Current consensus DPS estimate is 12.5, implying a prospective dividend yield of 5.7%. Current consensus EPS estimate suggests the PER is 48.9. |
Forecast for FY22:
Morgans forecasts a full year FY22 dividend of 12.70 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is 5.1, implying annual growth of 13.3%. Current consensus DPS estimate is 12.7, implying a prospective dividend yield of 5.8%. Current consensus EPS estimate suggests the PER is 43.1. |
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
TYR TYRO PAYMENTS LIMITED
Business & Consumer Credit
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Overnight Price: $3.91
Morgan Stanley rates TYR as Overweight (1) -
Morgan Stanley assesses Tyro Payments is fighting back after its terminal outages caused havoc in January-February and has a sharper competitive edge.
The company is now better equipped than its competitors to deal with any future outage and this message appears to be resonating with small-medium enterprise merchants.
Part of the story the broker believes is not well understood is the potential from the deal with Bendigo & Adelaide Bank ((BEN)), particularly as the roll-out of Tyro Payments hardware & software to the bank's customers has just started.
Morgan Stanley estimates this will lift total transaction value for Tyro Payments by $5bn and EBITDA by $12m in its first full year.
Overweight rating. Target price is raised to $4.60 from $4.10. Industry view is Attractive.
Target price is $4.60 Current Price is $3.91 Difference: $0.69
If TYR meets the Morgan Stanley target it will return approximately 18% (excluding dividends, fees and charges).
Current consensus price target is $4.01, suggesting upside of 1.5% (ex-dividends)
The company's fiscal year ends in June.
Forecast for FY21:
Morgan Stanley forecasts a full year FY21 dividend of 0.00 cents and EPS of minus 2.10 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -3.1, 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 FY22:
Morgan Stanley forecasts a full year FY22 dividend of 0.00 cents and EPS of minus 0.80 cents. How do these forecasts compare to market consensus projections? Current consensus EPS estimate is -0.5, 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. |
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 | |
AMX | Aerometrex | $0.80 | Morgans | 1.36 | 1.61 | -15.53% |
CQR | Charter Hall Retail REIT | $3.83 | Macquarie | 4.18 | 4.04 | 3.47% |
ELD | Elders | $11.78 | Macquarie | 13.96 | 14.11 | -1.06% |
IAG | Insurance Australia | $5.23 | Ord Minnett | 5.30 | 5.15 | 2.91% |
MAH | Macmahon | $0.19 | Macquarie | 0.30 | 0.06 | 400.00% |
MAI | Mainstream | $2.82 | Ord Minnett | 2.80 | 2.35 | 19.15% |
NWH | NRW | $1.50 | Macquarie | 2.10 | 0.42 | 400.00% |
NXL | Nuix | $2.76 | Morgan Stanley | 6.40 | 7.50 | -14.67% |
PPS | Praemium | $1.00 | Ord Minnett | 1.35 | 1.00 | 35.00% |
PRN | Perenti Global | $0.70 | Macquarie | 0.90 | 0.43 | 109.30% |
SCP | Shopping Centres Australasia | $2.55 | Credit Suisse | 2.54 | 2.50 | 1.60% |
Macquarie | 2.68 | 2.56 | 4.69% | |||
SFR | Sandfire Resources | $6.78 | Macquarie | 8.90 | 9.30 | -4.30% |
SKI | Spark Infrastructure | $2.20 | Morgans | 2.34 | 2.30 | 1.74% |
TYR | Tyro Payments | $3.95 | Morgan Stanley | 4.60 | 4.10 | 12.20% |
Summaries
AMX | Aerometrex | Add - Morgans | Overnight Price $0.80 |
CQR | Charter Hall Retail REIT | Outperform - Macquarie | Overnight Price $3.94 |
CSL | CSL | Downgrade to Neutral from Outperform - Macquarie | Overnight Price $302.90 |
EBO | EBOS | Neutral - Macquarie | Overnight Price $30.55 |
ELD | Elders | Outperform - Macquarie | Overnight Price $11.89 |
HDN | HOMECO DAILY NEEDS REIT | Add - Morgans | Overnight Price $1.47 |
IAG | Insurance Australia | Outperform - Credit Suisse | Overnight Price $5.17 |
Accumulate - Ord Minnett | Overnight Price $5.17 | ||
Buy - UBS | Overnight Price $5.17 | ||
LLC | Lendlease | Neutral - Macquarie | Overnight Price $12.36 |
MAH | Macmahon | Initiation of coverage with Outperform - Macquarie | Overnight Price $0.19 |
MAI | Mainstream | Hold - Ord Minnett | Overnight Price $2.84 |
NWH | NRW | Initiation of coverage with Outperform - Macquarie | Overnight Price $1.50 |
NXL | Nuix | Overweight - Morgan Stanley | Overnight Price $2.60 |
PPS | Praemium | Buy - Ord Minnett | Overnight Price $0.95 |
PRN | Perenti Global | Initiation of coverage with Outperform - Macquarie | Overnight Price $0.68 |
SCP | Shopping Centres Australasia | Neutral - Credit Suisse | Overnight Price $2.59 |
Outperform - Macquarie | Overnight Price $2.59 | ||
Hold - Ord Minnett | Overnight Price $2.59 | ||
SFR | Sandfire Resources | Outperform - Macquarie | Overnight Price $6.90 |
SKI | Spark Infrastructure | Add - Morgans | Overnight Price $2.27 |
TYR | Tyro Payments | Overweight - Morgan Stanley | Overnight Price $3.91 |
RATING SUMMARY
Rating | No. Of Recommendations |
1. Buy | 15 |
2. Accumulate | 1 |
3. Hold | 6 |
Thursday 17 June 2021
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