Best calls to action – Thursday, 18 August

About the author:

Author name:

By Andrew Tang

Job title:

Analyst - Equity Strategy

Date posted:

18 August 2022, 6:30 AM

Sectors Covered:

Equity Strategy and Quant

CSL Limited (ASX:CSL) - Poised for growth

FY22 results were slightly softer than expected, albeit in line with management's assumptions, with net profit falling 6% in cc on 3% revenue growth. Seqirus was the standout on strong demand for influenza vaccines, while Behring profit fell as plasma-based products were constrained on tight supply and higher costs, although certain Specialty product surprised to the upside.

Encouragingly, plasma collections are above pre-pandemic levels, and while industry wide challenges remain (eg staffing; increased costs), the worst appears behind us.

While FY23 NPAT guidance (+6-11%) appears modest, underlying growth is solid (11-14%) and excludes Vifor growth, which is still targeting low-to-mid teens (ex-amortisation), but will be updated on or before 17 Oct. We adjust FY23-24 estimates and roll forward our valuation multiples, with our price target decreasing modestly to (login to view). Add.

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

Corporate Travel (ASX:CTD) - Likely the 1st travel company globally to pay a dividend

CTD's FY22 result beat its guidance, our forecast and consensus following a particularly strong 4Q22 recovery. Unlike its peers, CTD was profitable at the bottom line (NPAT and not just EBITDA). Strong cashflow, a strong balance sheet (no debt) and a final dividend (sign of confidence) and were other key highlights.

4Q22 trends bode well for strong earnings growth in FY23 despite macro uncertainty, restricted airline capacity and question marks over when China will reopen. Our forecasts are largely unchanged. CTD remains our key pick of the travel sector. We reiterate our Add rating with a new price target of (login to view).

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

Santos Ltd (ASX:STO) - Alaska sanctioned while Dorado hits pause

Strong 1H22 result close to estimates, while interim dividend trailed. Alaska sanctioned and Dorado stalls, although neither core projects. More importantly STO has almost completed sale of 5% of PNG LNG (US$1.4-$1.5bn?).

Maintain Add rating with positive view and unchanged (login to view) target price.

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

Super Retail Group (ASX:SUL) - FY22 earnings: Is it a bird? Is it a plane?

SUL surprised the market by reporting much more resilient earnings in FY22 than had been forecast. EBIT of $397m was 15% higher than our estimate due to 4% higher sales and 110 bp higher margins.

All four brands reported a strong sales performance in 2H22, with +5.0% group LFL sales in the half (MorgansF: +3.1%). SUL commented that 'while current trading remains strong, the Group expects rising interest rates and higher costs of living will start to impact consumer spending in the second half'.

With no signs yet that the consumer is pulling back in Australia, it looks likely that 1H22 earnings will be resilient, especially against lockdown-affected comps. We still model a 17% y/y decline in PBT in FY23, but we have pulled that number up by 6% after today's strong result. We reiterate our ADD rating and increase our target price (login to view).

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