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Daily Market Reports | Mar 15 2023
An additional news report on the recommendation, valuation, forecast and opinion changes and updates for ASX-listed equities.
In addition to The Australian Broker Call Report, which is published and updated daily (Mon-Fri), FNArena has now added The Australian Broker Call *Extra* Edition, featuring additional sources of research and insights on ASX-listed stocks, also enlarging the number of stocks that make up the FNArena universe.
One key difference is the *Extra* Edition will not be updated daily, but merely "regularly" depending on availability of suitable quality content. As such, the *Extra* Edition tries to build a bridge between daily updates via the Australian Broker Call Report and ad hoc news stories, that are not always timely for investors hungry for the next information update.
Investors using the *Extra* Edition as a source of input for their own share market research should thus take into account that information after publication may not be up to date, or yet awaiting another update by FNArena's team of journalists.
Similar to The Australian Broker Call Report, this *Extra* Edition includes concise but limited reviews of research recently published by Stockbrokers and other experts, 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 of this Report.
The Australian Broker Call *Extra* Edition is a summary that has been prepared independently of the sources identified. Readers will check the full text of the recommendations and consult a Licenced Advisor before making any investment decision.
The copyright of this Report is owned by the publisher. Readers will not copy, forward or disseminate this Report to any other person. For more vital information about the sources included, see the bottom of this Report.
COMPANIES DISCUSSED IN THIS ISSUE
Click on a symbol for fast access.
The number next to the symbol represents the number of brokers covering it for this report -(if more than 1)
5GG ABC (2) ABP ABY ARU AVD BVS CCX CGS CHC CIP CMM COE (2) COF CQE DDH (2) DGL (2) DSE DUG EBR FCL FDV FZO (2) GMG HLA (4) HMC HMY HVN (2) IVC JAN KAR LME LYC M7T MCL MCR MOZ MTO (2) MYX NEU NIC (2) NOL NSR NTO (2) NUC NXD NXS (2) NXT (3) PBH (3) PGL PSI RDG REG RFG RGN RMC RUL SFR SGP SLA (2) SRG TLX (2) TSI TYR VGL WZR
Telecommunication – Overnight Price: $0.13
Bell Potter rates ((5GG)) as Speculative Buy (1) –
Following largely pre-released interim results, Bell Potter lowers its forecasts for Cloud Gaming revenues due to greater competition. Also, Pentanet's valuation is discounted to reflect rising near-term uncertainty around cash flows and the current cash balance.
Network and Telecommunications rose by 10.4% half-on-half and Cloud Gaming revenue increased by 56.8%.
The company exited the 1H with $6.1m in cash and available debt facilities of $5m, which management expects will fund growth and operations through FY23.
The target falls to 26c from 31c. Buy.
This report was published on March 3, 2023.
Target price is $0.26 Current Price is $0.13 Difference: $0.13
If 5GG meets the Bell Potter target it will return approximately 100% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 3.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 3.82.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 2.10 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 6.19.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Building Products & Services – Overnight Price: $1.62
Goldman Sachs rates ((ABC)) as Neutral (3) –
Despite a significantly higher contribution from property, Adbri experienced weaker-than-expected underlying earnings in FY22, explains Goldman Sachs.
As a result of this disappointment, the broker reduces its FY23-25 earnings (EBIT) estimates by -2-3% and lowers its target to $1.75 from $1.80. Neutral.
The analyst explains modest volume growth and significant price improvement was offset by headwinds for raw material, freight, labour, energy and fuel. Wet weather also impacted supply chains and the D&A expense was larger-than-expected.
Non-detached residential end markets such as apartments, infrastructure, commercial and mining should see ongoing strong demand, according to management, while backlogs should underpin 2023 orders in (detached) residential.
This report was published on March 1, 2023.
Target price is $1.75 Current Price is $1.62 Difference: $0.125
If ABC meets the Goldman Sachs target it will return approximately 8% (excluding dividends, fees and charges).
Current consensus price target is $1.72, suggesting upside of 5.5%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY23:
Goldman Sachs forecasts a full year FY23 dividend of 9.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 5.54%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.61.
How do these forecasts compare to market consensus projections?
Forecast for FY24:
Goldman Sachs forecasts a full year FY24 dividend of 10.00 cents and EPS of 14.00 cents.
At the last closing share price the estimated dividend yield is 6.15%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.61.
How do these forecasts compare to market consensus projections?
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Jarden rates ((ABC)) as Neutral (3) –
Jarden describes 2H results for Adbri as “messy” and notes an uncertain FY23 outlook. FY22 underlying profit (excluding property) came in at the low-end of guidance.
While the broker finds it difficult to predict the magnitude of pricing increases (largely due to the existence of long-term supply contracts), increasing 2H prices for cement, concrete and aggregate may offset some inflationary pressures in FY23.
Management certainly expects cost pressure headwinds will remain in 2023.
The analyst’s target falls to $1.65 from $1.80 as the cement, concrete, aggregate and lime business now contributes $1.17 to valuation (from $1.34), while the land bank’s contribution rises to 48c from 46c. The Neutral rating is unchanged.
This report was published on March 1, 2023.
Target price is $1.65 Current Price is $1.62 Difference: $0.025
If ABC meets the Jarden target it will return approximately 2% (excluding dividends, fees and charges).
Current consensus price target is $1.72, suggesting upside of 5.5%(ex-dividends)
The company's fiscal year ends in December.
Forecast for FY23:
Jarden forecasts a full year FY23 dividend of 0.00 cents and EPS of 15.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.35.
How do these forecasts compare to market consensus projections?
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 7.70 cents and EPS of 18.10 cents.
At the last closing share price the estimated dividend yield is 4.74%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 8.98.
How do these forecasts compare to market consensus projections?
Market Sentiment: -0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
REITs – Overnight Price: $2.68
Jarden rates ((ABP)) as Buy (1) –
Jarden reviews Australian REITs post the reporting season, observing earnings are holding but cash flow is weakening, which Jarden considers to be red flag.
Sector funds-from-operations increased by an average of 9% while operating cash flow fell -17%, Residential and Office copping the brunt of the fall.
The broker spies volatility ahead as interest rates continue to dominate headlines; and advises that investors keep their eyes peeled to a range of potential developments, including rising capitalised interest and rebates, incentives, trading profits boosted by top-line figures, and financial engineering around capital structures.
Jarden favours retail, childcare, storage and land leases as passive asset classes, and is cautious on Residential and Office. While the broker acknowledge fund managers' sensitivity to rate movements but believes they offer good medium-term value.
Abacus Property's rating is downgraded to Overweight from Buy. Target price eases to $3.20 from $3.30.
This report was published on March 2, 2023.
Target price is $3.20 Current Price is $2.68 Difference: $0.52
If ABP meets the Jarden target it will return approximately 19% (excluding dividends, fees and charges).
Current consensus price target is $3.19, suggesting upside of 18.8%(ex-dividends)
The company's fiscal year ends in June.
Forecast for FY23:
Jarden forecasts a full year FY23 dividend of 18.40 cents and EPS of 18.40 cents.
At the last closing share price the estimated dividend yield is 6.87%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.57.
How do these forecasts compare to market consensus projections?
Forecast for FY24:
Jarden forecasts a full year FY24 dividend of 19.30 cents and EPS of 19.30 cents.
At the last closing share price the estimated dividend yield is 7.20%.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 13.89.
How do these forecasts compare to market consensus projections?
Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Household & Personal Products – Overnight Price: $0.84
Shaw and Partners rates ((ABY)) as Hold (3) –
Shaw and Partners reduces its target for Adore Beauty to $1.10 from $1.80. While the 1H net loss was not as bad as expected, management lowered the 2H revenue growth outlook on higher cost inflation and weakening consumer sentiment.
Having missed consensus earnings forecasts over the last 18 months, the analyst feels the new ceo is looking to reset expectations, though this may take time.
Revenue in the first seven weeks of the 2H fell by -7.8% on the previous corresponding period and the company now expects flat revenues in the 2H, down from the double-digit growth originally mooted.
The Hold rating is unchanged.
This report was published on March 3, 2023.
Target price is $1.10 Current Price is $0.84 Difference: $0.26
If ABY meets the Shaw and Partners target it will return approximately 31% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.40 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 35.00.
Forecast for FY24:
Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 0.70 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 120.00.
Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Rare Earth Minerals – Overnight Price: $0.53
Bell Potter rates ((ARU)) as Upgrade to Buy from Hold (1) –
Arafura Rare Earths has suffered a -16% sell off in response to Tesla's investor day, in a reaction Bell Potter has found overdone. Tesla discussed the removal of rare earths from their next generation motors, and drove a decline across rare earth miners and magnet makers globally.
The broker highlights several key milestones on the horizon for Arafura Rare Earths, including a final investment decision due in March. Project financing looks to close in the middle of 2023, allowing construction to lead into first production at the end of 2025.
The rating is upgraded to Buy from Hold and the target price of $0.72 is retained.
This report was published on March 7, 2023.
Target price is $0.72 Current Price is $0.53 Difference: $0.19
If ARU meets the Bell Potter target it will return approximately 36% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Bell Potter forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 2.58 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 20.54.
Forecast for FY24:
Bell Potter forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 3.07 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is minus 17.26.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
Industrial Sector Contractors & Engineers – Overnight Price: $0.52
Shaw and Partners rates ((AVD)) as Buy (1) –
Adverse weather conditions have left Shaw and Partners disappointed by Avada Group's first half, with the broker left wanting by revenue of $84.7m (up 22% year-on-year), gross profit of $16.5m (down-5%), and pro-forma earnings of $6.2m (down -17%).
The outlook does suggest some return to more typical trading as weather conditions normalise, the broker suggests, while rate increases agreed to with key existing and new clients should go some way in mitigating cost pressures.
Shaw and Partners notes some uncertainty remains around earnings recovery. The Buy rating is retained and the target price decreases to $0.80 from $1.29.
This report was published on March 1, 2023.
Target price is $0.80 Current Price is $0.52 Difference: $0.283
If AVD meets the Shaw and Partners target it will return approximately 55% (excluding dividends, fees and charges).
The company's fiscal year ends in June.
Forecast for FY23:
Shaw and Partners forecasts a full year FY23 dividend of 0.00 cents and EPS of 4.80 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 10.77.
Forecast for FY24:
Shaw and Partners forecasts a full year FY24 dividend of 0.00 cents and EPS of 7.20 cents.
At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 7.18.
All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources
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