Best calls to action – Monday, 21 February

About the author:

Andrew Tang
Author name:
By Andrew Tang
Job title:
Analyst - Equity Strategy
Date posted:
21 February 2022, 6:00 AM
Sectors Covered:
Equity Strategy and Quant

HeathCo REIT - A solid maiden result

HCW's maiden result highlighted that the portfolio's metrics have strengthened since IPO with cash collection at 100%; improved occupancy to 98%; and higher weighted average lease expiry which now sits at 10 years.

Post revaluations and acquisitions in the 1H, the portfolio is valued at $700m across 40 assets vs $555m at IPO. NTA increases to $1.94 vs $1.86 at IPO. FY22 guidance was reiterated and comprises FFO of 5cps (vs PDS at 4.3c) and DPS of 7.4c (implied annualised yield of 4.3%).

HCW is in a net cash position which provides future scope for acquisitions and delivering on the significant opportunities within the development pipeline. The active pipeline is currently valued at $140m (on track and budget). We retain an Add rating with a price target of (login to view). 

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

QBE Insurance Group - Some comfort in the detail

While acknowledging some issues with the result, e.g. the earnings miss, broader guidance than expected etc, we thought the underlying result detail actually still painted a reasonable picture into FY22.

We lower QBE FY22F/FY23F EPS by 9% and 5% on lower margin assumptions offsetting strong top-line growth estimates. Our PT is reduced to (login to view). ADD.

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

Pwr Holdings Limited - Speeding along

PWH's 1H22 result was well ahead of our expectations.

Key positives: Motorsports was the standout performer with revenue jumping 20%; Balance sheet remains very healthy with net cash of $16.7m (1H21: net cash $11.8m); EBITDA margin (ex-JobKeeper) rose 380bp to 31.2%.

Key negatives: Automotive Aftermarket and Emerging Technologies revenue was below our expectations; Operating cash flow was down 45% mainly due to higher working capital. FY22F/FY23F/FY24F EBITDA changes by +2%/+2%/+2%.

Our target price rises to (login to view) following a roll-forward of our model to FY23 forecasts. Add rating maintained. 

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

Peoplein Limited - Well placed to capitalise on a strong outlook

PPE's 1H22 result exceeded our forecast. Organic EBITDA growth was 10%, with Technology (revenue +190%) the standout. Cash conversion was also strong.

With continued organic growth expected in the 2H22 and incremental M&A contributions of ~A$2.5m EBITDA, we think PPE is on track to hit the upper-end of it's A$45-47m guidance range. Our FY22 EBITDA forecast rises 2.2% to A$46.5m.

We continue to see PPE's positive earnings outlook, capacity for accretive M&A and growing Technology vertical as supportive of a re-rating. Add maintained

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

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