AGM season — upcoming catalysts

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
19 October 2020, 4:25 PM
Sectors Covered:
Equity Strategy and Quant

  • With COVID-19 wreaking havoc on the ability to forecast earnings in the current year, many companies are seeking to keep the market informed via trading updates during this AGM period. We are also seeing a higher proportion of market updates driving sharp share price reactions.
  • In this piece, the research team nominates stocks that could surprise or disappoint the market as we close out first half FY21.
Company Catalyst Reaction Comment
Cochlear (COH)

Trading update.

AGM (20 Oct)

 Positive As no FY21 guidance has been given, we expect a trading update at the 20 October AGM, with the main emphasis on patient volumes, referrals and scheduled surgeries.
Coronado (CRN) Quarterly production (21 Oct)  Positive
Met coal markets/prices have improved strongly in recent weeks improving cash generation. We expect robust quarterly production and efforts to further de-risk the balance sheet are on track. We expect steel intensive stimulus in customer jurisdictions and expectations for Chinese relaxation of import quotas into 2021 to further drive coal prices.
Healius (HLS)

Trading update.

AGM (22 Oct)

 Positive
Management will provide a market update at 22 Oct AGM, with the recommencement of dividends likely and a possible special dividend on the back of the A$470m sale of its Medical centres business.
Suncorp (SUN) AGM (22 Oct)  Positive
Expecting a solid trading update and for management to quantify the cost out plan.
Adairs (ADH)

Trading update

AGM (26 Oct)

 Positive
1Q21 sales are likely to show very strong growth, despite VIC restrictions. With no major escalation in costs, we think strong opex leverage could lead to further consensus earnings upgrades. ADH has valuation support, a solid yield and FY21 will represent a very strong period of growth.

Corporate Travel (CTD),

Flight Centre (FLT)

CTD AGM (27 Oct)

FLT AGM (5 Nov)

 Positive
Will point to slowly improving traffic volumes but really they need borders to reopen. Liquidity updates will be key. The bigger catalysts for these stocks is borders reopening and an effective vaccine.
Redbubble (RBL)

Trading update.

AGM (28 Oct)

 Positive
1Q21 earnings update likely to come before the AGM on 28 Oct. Momentum continues, competitors have seen strong August sales (Society 6, KGN, TPW). Leverage of strong sales momentum to earnings could surprise on the upside.
Super Retail (SUL)

Trading update.

AGM (28 Oct)

 Positive
We expect SUL to provide a strong trading update at its AGM, similar to its August result update. The combination of domestic tourism/consumption tailwinds leaves all SUL’s businesses well placed (perhaps excluding Macpac). We think these trends could continue for some time and see upside risk to consensus forecasts.
Wagners (WGN)

Trading update.

AGM (28 Oct)

 Positive
While a formal trading update may be unlikely, commentary on general trading YTD should be positive and reflect the benefit of existing major projects already secured and resumption of normalised cement volumes. Could highlight the potential future benefit of recent Federal Budget measures and expectation of an improved FY21 result.
Impedimed (IPD)

Data point.

AGM (28 Oct)

 Positive
The key catalyst is the publication of the meta data analysis for lymphoedema which we expect to be positive and drive private payor uptake. The AGM is set for 28 October and we expect this catalyst on or before this point.
Reliance (RWC)

Trading update.

AGM (29 Oct)

 Positive
RWC’s sales performance in 1Q21 was strong. While the short-term outlook remains uncertain, management is likely to provide an update on trading conditions at the AGM on 29 October with potential for positive momentum to continue. 
Volpara (VHT) FDA decision (Oct)  Positive
Management noted that the US regulator, the FDA will announce before the end of October that every woman who has a mammogram must be told of her breast density and the implications. A positive for VHT’s technology.
Coca-Cola Amatil (CCL)

Investor day

(2 Nov)

 Positive
Should point to improving volumes as its markets reopen. Clearly emerging markets (Indonesia and Fiji) will take longer to recover. The investor day will also provide more detail on CCL’s ability to permanently retain its cost-out targets.
Eagers Automotive (APE)

Investor day

(TBA, early Nov)

 Positive
We expect the company will focus on 3 key pillars of its growth strategy: 1) cost-out; 2) property acquisition strategy; and 3) its used strategy to incorporate EasyAuto123. There is also the chance the company will provide a trading update. We think current dynamics could see the company nicely outperform market expectations.
Credit Corp (CCP)

Trading update.

AGM (5 Nov)

 Positive
We expect CCP to reaffirm earnings and key metrics guidance which was set at the full year result. Some broadly positive commentary that the debt sale market is returning in Australia could be a positive catalyst.
Treasury Wine Estate (TWE)

Trading update.

AGM (5 Nov)

 Positive
AGM will likely point to improved trading conditions as its key markets reopen post COVID-19 restrictions, particularly in China. However, the threat of a future tariff from China (its largest business unit) is likely to overhang the stock.
Ansell (ANN)

Trading update.

AGM (5 Nov)

 Positive
Despite giving FY21 guidance (EPS US$1.26-1.38, 3-13%), we expect a trading update at the 5 Nov AGM, with a focus on the outlook across Strategic Business Units (SBUs), addressing supply shortages in Exam/Single use medical gloves, macros and cost management.
Incitec Pivot (IPL) FY20 result (10 Nov)  Positive
FY20 result is on 10 November. Will likely point to improved operating conditions and its focus on the controllables - strategies are in place to deliver at least A$100-110m of EBIT improvements by FY22.

Bingo (BIN)

Trading update.

AGM (11 Nov)

 Positive
Did not provide guidance at the August result, and we expect a weaker earnings period in FY21 given softness in Sydney-centric construction and demolition waste. BIN has said it is chasing volume at the expense of price, and expects margins to decline but strong post collection performance in the 1Q should support the share price.
Sonic Healthcare (SHL)

Trading update.

AGM (12 Nov)

Positive
Management will provide a market update at its 12 Nov AGM, with the outlook dependent on fluctuations in base business and COVID-19 testing revenues.
Elders (ELD) FY20 result (16 Nov)  Positive
We believe earnings will be strong given supportive growing conditions and will likely beat our forecast. Outlook commentary should also be upbeat.

Seek

(SEK)

Trading update.

AGM (19 Nov)

 Positive
Domestic listings volumes broadly consistent with earnings expectations at present and likely above Seek’s indicative guidance. Potential activity around Zhaopin stake a positive catalyst with Seek confirming they are in talks with potential investors around a sale of a stake in this business.
Virtus Health (VRT)

Trading update.

AGM (19 Nov)

 Positive
IVF cycle numbers are increasing (Medicare data provided each month) after a period of lock down and elective surgery deferral (recommenced late April). We expect the AGM (19 November) will provide a positive update on cycle volumes.

Orica

(ORI)

FY20 result (20 Nov)  Positive
FY20 result (20 Nov) has been pre released and points to a weak 2H20 due to COVID-19. We expect outlook commentary should reiterate that it expects customer demand will start to return to pre COVID-19 levels from around November 2020 (i.e. 1Q21) and highlight its various growth projects (Burrup, Exsa, SAP).
Ramsay (RHC)

Trading Update.

AGM (24 Nov)

 Positive
Despite strong industry fundamentals and a large backlog of patients awaiting surgeries, with no FY21 guidance we expect a trading update at the 24 November AGM. 
Qube (QUB)

Trading update.

AGM (26 Nov)

 Negative Minimal guidance was provided at the August result, with QUB acknowledging it had very limited visibility of near-term volumes in key markets. It also expects volumes in a number of key markets to decline in FY21. The market will be watching for an update on the Moorebank monetisation process.
Micro-X (MX1) Data point (Oct/Nov)  Positive
The next catalyst is the outcome of a grant application lodged with the Federal Government as part of the Stroke Alliance. If successful, MX1 is likely to receive ~A$14m over the next two years. A decision is expected in the next two months.
Collins Foods (CKF)

Trading update.

1H result (1 Dec)

 Positive
We expect a strong 1H21 result, driven by outperformance of its core KFC Australia business (noting continued consumer strength in QLD and WA - CKF’s primary exposures). As a result, we believe there is upside risk to consensus FY21 sales/EBITDA forecasts.
Nufarm (NUF) AGM (18 Dec)
 Positive
Should highlight improved summer cropping conditions in Australia. It will also reiterate its performance improvement program (PIP) target of A$35-40m in run-rate savings in FY22, its commitment to turning around the underperforming European operations and focus on improving its balance sheet metrics.
Mach 7 (M7T) Contract wins
 Positive
Management has indicated the outcome of various and material tenders is expected before the end of CY20.
Acrow (ACF) Contract wins  Positive
Work pipeline remains strong with ongoing government support for infrastructure projects. ACF is well placed for further contract wins, especially on the east coast.

We forecast underlying EBITDA (pre-AASB16) of A$56.4m, implying a 2H20 loss of A$8.1m. Reuters consensus is A$69.5m.

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