Best calls to action – Friday, 19 August

About the author:

Author name:

By Andrew Tang

Job title:

Analyst - Equity Strategy

Date posted:

19 August 2022, 6:30 AM

Sectors Covered:

Equity Strategy and Quant

Treasury Wine Estate (ASX:TWE) - Solid start but there is much more growth to come

Despite all the external headwinds, TWE's FY22 result was solid and in line with our forecast and its guidance. Importantly, the 2H demonstrated strong EBITS and NPAT growth (+14.1% and +18.8% on pcp).

Despite cost pressures, the foundations are now in place for TWE to deliver strong double digit growth from FY23. Pleasingly, the benefits of its new divisional model are clearly evident and the Penfolds reallocation strategy has been a success.

Trading at a material discount to our valuation and its pre-COVID multiples, we maintain an Add rating with a new price target of (login to view) on this high quality company.

Read our full reports and latest price targets on ASX:TWE here.

Homeco Daily Needs (ASX:HDN) - Further value to unlock

HDN delivered a solid FY22 result with the underlying portfolio performing in line with expectations. NTA stands at $1.52.

Future growth will come via the development pipeline which is valued at +$500m. We retain an Add rating and (login to view) price target.

Read our full reports and latest price targets on ASX:HDN here.

Pro Medicus (ASX:PME) - Expensive for a reason

PME recorded another year of strong growth across all metrics with the key highlight being further EBIT margin expansion to 67% (+400 bps on the pcp) well above expectations, highlighting the operating leverage of the business.

Outlook remains as strong as ever, highlighted by an increasing number of requests for tender proposals and more renewals from existing customers. The five-year forward contract value is up 31% to A$420m.

Our price target increases marginally to (login to view) and we retain an Add recommendation.

Read our full reports and latest price targets on ASX:PME here.

Find out more

You can find further detailed analysis of company results this reporting season by browsing our reporting season tag, and view a full list of upcoming results on our Reporting Season Calendar.

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Disclaimer: Analyst may own shares. The information contained in this report is provided to you by Morgans Financial Limited as general advice only, and is made without consideration of an individual's relevant personal circumstances. Morgans Financial Limited ABN 49 010 669 726, its related bodies corporate, directors and officers, employees, authorised representatives and agents (“Morgans”) do not accept any liability for any loss or damage arising from or in connection with any action taken or not taken on the basis of information contained in this report, or for any errors or omissions contained within. It is recommended that any persons who wish to act upon this report consult with their Morgans investment adviser before doing so.