Best calls to action – Thursday, 10 February

About the author:

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

Peoplein Limited (ASX:PPE) - Balancing its portfolio

PPE has expanded into the Accounting & Finance recruitment sector through the A$16.0m acquisition of Perigon Group (3.7x FY23F EBITDA).

With existing key management retained, earn-out hurdles in place and initial cross-selling opportunities identified, we think PPE is well placed to grow this business. We expect a solid interim result on 18 February and organic growth to accelerate over the 2H22 as COVID challenges normalise.

Current international candidate sourcing initiatives should deliver benefits in FY23. With a solid organic growth outlook, potential for further accretive M&A and an undemanding valuation (FY23F PE of ~11.5x), we maintain an Add rating.

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

Dexus Industria REIT (ASX:DXI) - Active 1H positions portfolio well

DXI's result reflected a busy half with strong leasing activity; $584m in new acquisitions funded via a capital raising; new manager Dexus entering into three JVs with DXI; and the establishment of a $350m development pipeline.

The portfolio is valued at $1.76bn and is now weighted 79% towards industrial and logistics assets. The weighted average cap rate is 5.1% (from 5.8% at June); WALE 5.9 years; and occupancy 97%. FY22 guidance is unchanged and comprises FFO of 18.1-18.5c and DPS of 17.3c which equates to a distribution yield of +5%. We retain an Add rating on a revised price target of (login to view).

DXI is trading at a discount to NTA, offers a +5% distribution yield with solid underlying portfolio metrics and near/medium term growth opportunities via the development pipeline.

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

Alliance Aviat. (ASX:AQZ) - Short-term turbulence, but inflection point in sight

AQZ's interim result and FY22 guidance was weaker than expected. However, significant progress on its E190 deployment has been achieved over the past ~18 months and cash generation in the underlying Fokker business remained robust.

Our positive investment case on AQZ has been predicated on the step-change in FY23 earnings growth as its material fleet expansion is deployed and we continue to think the company is nearing this inflection point; Add rating maintained.

Read our full reports and latest price targets on ASX:AQZ 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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