Australian Broker Call *Extra* Edition – Apr 03, 2023

Daily Market Reports | 11:11 AM

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)

ADA   AX1 (2)   BRG   CCX   G1A   IDT   JRV   LTR   MTS   PLS (2)   RWC   SLA   WOW  

ADA    ADACEL TECHNOLOGIES LIMITED

Software & Services – Overnight Price: $0.60

Taylor Collison rates ((ADA)) as Outperform (2) –

First half revenue was in line with expectations although EBITDA was materially below. Taylor Collison believes Adacel Technologies has an opportunity to double annual revenue over the next 18 months, given the award of six tenders. Approximately 20% of the contracted base is up for renewal over this period.

Management has guided to US$4.4-4.6m for EBITDA and net profit off US$2.4-2.6m in FY23. The broker reduces estimates to reflect this guidance and also reduces FY224 estimates by -48% to reflect the delay in Estonia and lower ATOP revenue. Outperform maintained.

This report was published on March 24, 2023.

Current Price is $0.60. Target price not assessed.
The company’s fiscal year ends in June.

Forecast for FY23:

Taylor Collison forecasts a full year FY23 dividend of 4.82 cents and EPS of 4.53 cents.
At the last closing share price the estimated dividend yield is 8.03%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 13.26.

Forecast for FY24:

Taylor Collison forecasts a full year FY24 dividend of 4.82 cents and EPS of 5.11 cents.
At the last closing share price the estimated dividend yield is 8.03%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.74.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

AX1    ACCENT GROUP LIMITED

Apparel & Footwear – Overnight Price: $2.37

Goldman Sachs rates ((AX1)) as Buy (1) –

Goldman Sachs raises its FY24 and FY25 earnings (EBIT) forecasts to levels 9.8% and 12.7%, respectively, ahead of consensus estimates.

The broker feels the company’s earnings potential is currently being underestimated, and believes protection from a slowdown in discretionary spending is afforded by exposure to a younger consumer and performance footwear.

Upside may derive from several sources, including store rollouts and market share gains among key brands the company distributes, suggest the analysts.

The target is increased to $3.10 from $2.90. Buy.

This report was published on March 30, 2023.

Target price is $3.10 Current Price is $2.37 Difference: $0.73
If AX1 meets the Goldman Sachs target it will return approximately 31% (excluding dividends, fees and charges).
Current consensus price target is $2.29, suggesting downside of -3.4%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY23:

Goldman Sachs forecasts a full year FY23 dividend of 15.00 cents and EPS of 15.00 cents.
At the last closing share price the estimated dividend yield is 6.33%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 15.80.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 15.2, implying annual growth of 161.6%.
Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 7.1%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY24:

Goldman Sachs forecasts a full year FY24 dividend of 7.00 cents and EPS of 16.00 cents.
At the last closing share price the estimated dividend yield is 2.95%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.81.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 14.7, implying annual growth of -3.3%.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.1.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

Jarden rates ((AX1)) as Overweight (2) –

The consumer has (finally) started to moderate spending, suggests Jarden, after reviewing February retail sales data from the Australian Bureau of Statistics.

The analysts form this view from weaker non-food sales in February, more recent surveys showing deteriorating confidence, increased inventory levels and signs of a more pronounced slowing in March.

Moreover, the broker expects a further weakening of spending through 2023, compounded by increased competition, in particular from Amazon.

Jarden favours defensive plays or those with lower exposure to housing like Accent Group. The Overweight rating and $2.50 target are unchanged. 

Other stocks fitting the broker’s preferred defensive and/or low housing exposure profile are Universal Store ((UNI)), Treasury Wine Estates ((TWE)), Corporate Travel Management ((CTD)) and Flight Centre Travel ((FLT)).

This report was published on March 29, 2023.

Target price is $2.50 Current Price is $2.37 Difference: $0.13
If AX1 meets the Jarden target it will return approximately 5% (excluding dividends, fees and charges).
Current consensus price target is $2.29, suggesting downside of -3.4%(ex-dividends)

Forecast for FY23:

Current consensus EPS estimate is 15.2, implying annual growth of 161.6%.
Current consensus DPS estimate is 16.9, implying a prospective dividend yield of 7.1%.
Current consensus EPS estimate suggests the PER is 15.6.

Forecast for FY24:

Current consensus EPS estimate is 14.7, implying annual growth of -3.3%.
Current consensus DPS estimate is 13.0, implying a prospective dividend yield of 5.5%.
Current consensus EPS estimate suggests the PER is 16.1.

Market Sentiment: 0.4
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

BRG    BREVILLE GROUP LIMITED

Household & Personal Products – Overnight Price: $19.10

Jarden rates ((BRG)) as Underweight (4) –

The consumer has (finally) started to moderate spending, suggests Jarden, after reviewing February retail sales data from the Australian Bureau of Statistics.

The analysts form this view from weaker non-food sales in February, more recent surveys showing deteriorating confidence, increased inventory levels and signs of a more pronounced slowing in March.

Moreover, the broker expects a further weakening of spending through 2023, compounded by increased competition, in particular from Amazon.

Jarden favours defensive plays or those with lower exposure to housing like Woolworths Group ((WOW)) and remains cautious on the discretionary sector, and is Underweight Breville Group. The $20.30 target is unchanged.

The broker is also Underweight on other discretionary exposures including JB Hi-Fi ((JBH)), Harvey Norman ((HVN)) and Nick Scali ((NCK)).

This report was published on March 29, 2023.

Target price is $20.30 Current Price is $19.10 Difference: $1.2
If BRG meets the Jarden target it will return approximately 6% (excluding dividends, fees and charges).
Current consensus price target is $23.36, suggesting upside of 22.3%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY23:

Jarden forecasts a full year FY23 dividend of 30.00 cents and EPS of 77.10 cents.
At the last closing share price the estimated dividend yield is 1.57%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 24.77.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 75.9, implying annual growth of N/A.
Current consensus DPS estimate is 29.3, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 25.2.

Forecast for FY24:

Jarden forecasts a full year FY24 dividend of 36.00 cents and EPS of 88.80 cents.
At the last closing share price the estimated dividend yield is 1.88%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 21.51.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 86.7, implying annual growth of 14.2%.
Current consensus DPS estimate is 33.6, implying a prospective dividend yield of 1.8%.
Current consensus EPS estimate suggests the PER is 22.0.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

CCX    CITY CHIC COLLECTIVE LIMITED

Apparel & Footwear – Overnight Price: $0.54

Canaccord Genuity rates ((CCX)) as Buy (1) –

Shares of City Chic Collective’s peer in the US, Torrid, jumped by 22% following the release of its recent 4Q results, which showed improving metrics. Torrid’s gross profit margins stabilised quarter-on-quarter, reversing a declining trend, notes the analyst.

These results have positive implications for City Chic Collective, suggests the broker, along with further anecdotal evidence on industry stabilisation around discounting, inventory and earnings margins.

The Buy rating and $1.00 target are maintained.

This report was published on March 29, 2023.

Target price is $1.00 Current Price is $0.54 Difference: $0.46
If CCX meets the Canaccord Genuity target it will return approximately 85% (excluding dividends, fees and charges).
Current consensus price target is $0.59, suggesting upside of 8.3%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY23:

Canaccord Genuity forecasts a full year FY23 dividend of 0.00 cents and EPS of minus 7.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 7.71.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -5.4, 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:

Canaccord Genuity forecasts a full year FY24 dividend of 0.00 cents and EPS of minus 4.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 13.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 2.5, implying annual growth of N/A.
Current consensus DPS estimate is 0.8, implying a prospective dividend yield of 1.5%.
Current consensus EPS estimate suggests the PER is 21.6.

Market Sentiment: 0.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources