Focus List September 2022 –

Structural Growth
Back on the Menu
Our monthly view on Australian equities.

07 September 2022

Issued by Wilsons Advisory and Stockbroking Limited (Wilsons) ABN 68 010 529 665 - Australian Financial Services Licence No 238375, a participant of ASX Group and
should be read in conjunction with the disclosures and disclaimer in this report.
August Recap
The Australian equity market
Figure 1: Energy and Materials led the charge in August
edged higher in August, posting a solid
0.6% gain for the month. Higher than A-REITs
the MSCI World (US$), which was
Consumer Staples
down 2.6%.
Utilities
Reporting season demonstrated the
Financials
resilience of corporate earnings as
companies reported generally positive IT
results that, on average, exceeded
expectations for FY22. Consumer Discretionary

Healthcare
Read Reporting Season Wrap-up
ASX 300
The market’s optimism was dampened
towards the end of the month by Industrials
Federal Reserve Chair Jerome Powell’s
Communication Services
comments at the Jackson Hole Economic
Symposium, which reaffirmed the Materials
central bank’s commitment to bringing
inflation into line with its 2% target while Energy
acknowledging this will bring ‘some pain’
-6% -4% -2% 0% 2% 4% 6% 8%
to households and businesses.
Source: Refinitiv, Wilsons. 1 month price change %
Interest rate pressures intensified
throughout the month as the US 10-year
yield reversed course from its recent Figure 2: EV minerals and coal account for the top 4 best performing ASX 100
trend, grinding 50 BPS higher to 3.15% at stocks in August
month end.
OZL
The energy and materials sectors
performed the strongest as they PLS
were buoyed by strong results from
companies exposed to coal, LNG, and WHC
EV minerals (i.e. copper, lithium, nickel
and rare earths). AKE
Defensive sectors fared the worst during
A2M
the month. The interest rate-sensitive
A-REIT sector was the weakest performer NXT
as it felt the valuation impact of rising
yields. Consumer staples and utilities ASX
were weighed down by disappointing
results and forward earnings downgrades RWC
during the month.
BEN
From an individual stock perspective, the
best performing ASX 100 stocks were OZ DMP
Minerals (OZL) (Focus List 2%) (+36.2%),
which rejected a takeover bid from BHP
-20% -10% 0% 10% 20% 30% 40%
Group (BHP) during the month, as well
as Pilbara Minerals (PLS) (+31.8%) and Source: Refinitiv, Wilsons. % price change in August
Whitehaven Coal (WHC) (+28.2%). The
worst performers were Dominos (DMP)
(-12.3%), Bendigo Bank (BEN) (-12.2%)
and Reliance Worldwide (RWC) (-11.4%).

2
ISG Outlook
This month includes a number of
short-term tests, and these tests could Figure 3: Bond yields crept up in August; we think they have likely peaked
set the tone for the rest of the year.
4.5
US inflation a key data point
4.0
this month
The Australian equity market is 3.5
sometimes at the mercy of what
happens in the US. The US 10-year bond 3.0
yield is generally seen as a global proxy
for the risk-free rate and is therefore 2.5
significant to global markets outside the
US, like Australia. 2.0

The US CPI data for August comes out 1.5

on 13 September. A lower-than-expected
outcome could bolster jittery equity 1.0
markets ahead of the Fed meeting
on 21 September. This might reverse 0.5
some of the bearish sentiment we
saw intensify over August, especially 0.0
for the more high-growth ASX sectors Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Sep-22
such as healthcare, technology and
communication services. US 10 year govt. yield % AU 10 year govt. yield %
Source: Refinitiv, Wilsons.

Earnings > valuations

After a significant valuation recalibration Figure 4: ASX 300 downgrades slowed in reporting season but still edged lower
in the first half of the calendar year, we
8
believe the market has started to shift its
focus away from valuations. 6

This change in focus may become 4

more prominent if inflation eases and
bond yields fall, while earnings continue 2
to be downgraded. 0

Quality still king -2

The risk still looks to the downside for -4
earnings over the next 6 months as
demand gets weaker, margins come -6
under pressure as costs remain elevated, -8
and the global economy starts to slow at
a faster rate. -10

As earnings become the focus of the -12

Oct-21
Oct-19

Oct-20

Jan-22
Oct-17

Oct-18

Jan-20

Jan-21

Jul-21

Jul-22
Jan-18

Jan-19

Jul-19

Jul-20
Jul-17

Jul-18

Apr-22
Apr-20

Apr-21
Apr-18

Apr-19

second half of this year, we continue

to shift our orientation towards quality
earnings. With a slowing economy and
higher earnings uncertainty, we believe
quality is the most prudent place to
invest in equity portfolios. Stocks with
high-quality, resilient earnings streams
should be increasingly sought after by
the market as more cyclical stocks lose
their appeal.
Source: Refinitiv, Wilsons. S&P/ASX 300 - 12mth fwd 1mth %ch
We have added NextDC (NXT) to the
Focus List and increased our ResMed
(RMD) position to add more quality to
the portfolio. We have removed Judo
Bank (JDO) and trimmed BHP to remove
some cyclicality, and based on our more
cautious view of iron ore over the next
6-12 months.

3
Figure 5: Focus List positioning

August September Market Focus List

Sectors ISG View
Weighting Weighting Weight Stocks

Cyclical

The Focus List is underweight resources at a headline level, but this

is predominately due to our weighting in iron ore focused miners
rather than our weighting to other sub sectors. We like resources as
an inflation hedge and protection against a longer than expected
Russia/Ukraine conflict. We believe that there could be a sustained
BHP, STO, boom in miners associated with EV minerals. We have therefore
Resources 22.5% 20.5% 24.8% WDS, OZL, OW positions in copper and lithium via OZL and AKE respectively.
NST, AKE
We have recently trimmed our position in BHP to go
further underweight.
Focus List is overweight: energy, copper, EV minerals.
Neutral: gold
Underweight: iron ore

The Focus List is underweight/neutral the banks. We believe

net interest margins (NIM) of the majors will grow faster than
consensus forecasts. However, with the RBA increasing interest
rates at such a lightening pace, we are concerned loan growth could
NAB, WBC, slow substantially.
Banks 20.5% 19.5% 20.1%
ANZ
We removed JDO, the smallest bank in the Focus List as we believe
there may be more pain to come as it tries to build its book over the
next few years – a recession or significant slowdown in the middle
would likely be a headwind for earnings and the stock price.

Resources and banks provide a large allocation to these sectors but

we also hold QAN and TAH (as COVID recovery plays). While these
Cyclical Value 5.0% 5.0% 8.5% QAN, TAH
stocks are cyclical, we believe the market is mispricing the earnings
potential of these companies.

We believe these quality cyclicals will continue to generate high

returns on capital at this point in the cycle, even though higher
bond yields are putting pressure on valuations. MQG and JHX
remain core holdings of the Focus List.
While MQG and JHX will not be immune to an economic slowdown
Quality Cyclical 9.0% 9.0% 8.2% MQG, JHX or a recession, we believe these companies can cover their costs
of capital at the bottom of the economic cycle, a charactersitic we
like when holding these stocks throughout the cycle. The earnings
potential of both these stocks over the medium term are potentially
still underestimated by the market and both these stocks still look
like good buying opportunities.

Growth

The Focus List has a structural bias towards quality growth. We still
hold these stocks as we believe they have a strong growth trajectory
over the medium term, but higher bond yields have heightened
ALL, GMG,
valuation pressure over the past 6 months. In our opinion, the
Structural Growth 11.5% 13.5% 7.7% SEK, PNI,
NXT
growth stocks in the Focus List have been oversold over the past
few months. US and Australian bond yields look to have peaked,
while our preferred growth exposures have tangible earnings
growth prospects.

We are overweight high-growth stocks. We are still reasonably

cautious on high growth stocks due to valuations, but as we
High Growth 4.0% 4.0% 2.1% XRO, TLX believe bond yields have likely peaked these names should start
to outperform. We believe XRO and TLX are the best picks from
this style.

4

Quality Defensive
We currently have a preference for quality defensives. In a mid-
late cycle, we prefer companies we believe will be resilient to the
CSL, IAG, downside risks that are more prevalent in this part of the cycle.
TLS, HCW,
25.0% 26.0% 28.7% Additionally, given the level of uncertainty and volatility that is
TLC, CWY,
RMD persistent in markets at the moment, we believe holding names that
are less sensitive to the economy and rising rates to be a prudent
decision. Our picks are healthcare, lotteries, insurance and telcos.

Hidden Value

We are always on the lookout for stocks with hidden value. We

find this subset of the portfolio can provide above-market returns
Hidden Value 2.5% 2.5% N/A NWS
that are less correlated to the rest of the market. NWS should have
catalysts to highlight value to the market over the next 12 months.
Source: Refinitiv, Wilsons.

Adding NextDC (NXT) to the Focus List (+2%)

Portfolio rationale
We have added NXT to the Focus List to:
1. Lower the beta of the Focus List. NXT
has a beta of 0.23 vs the current beta
of the Focus List of 1.06.
2. Add more growth to the Focus List.
NXT is expected to deliver 21% p.a.
EBITDA growth over the next few
years. The portfolio is expected to
have 9% vs the benchmark of 5%.
Figure 6: Data centre capacity is expected to grow at above market levels over
the medium term
16,000
14,000
12,000
3. Add more quality – domestic market
leader, management has transparency
over future earnings with a clear
pathway for long-term growth. Since
FY15, NXT has either met or beaten
its existing or upgraded revenue and
EBITDA guidance.
Adding NXT will increase the earnings
multiple of the Focus List and reduce the
expected dividend yield. However, we
think this is an appropriate risk-reward
trade-off for higher quality, lower beta
and better earnings growth (and growth
we have high conviction on).
Investment thesis
1. Strong sector tailwinds
Cloud computing is arguably one of the
more prominent technology themes of
the decade ahead. The cloud provides
on-demand computer system resources,
such as storage and computing power,
without direct user management. The
functions of a large cloud are usually
distributed among multiple locations,
each of which is a data centre.

The cloud is capturing a larger share

10,000 of global IT spending as consumers
want faster computing power, work
MW

8,000 remotely and consume more technology

through a variety of different devices.
6,000 We still believe the migration to cloud
computing has a long runway. We
4,000 believe NXT is a domestic winner of this
transition to the cloud.
2,000

-
2022 2023 2024 2025 2026
Total hyperscale data centre capacity leased globally
Source: Digital Realty Trust Q2 2022 Presentation, McKinsey & Company Report, IMR, Wilsons.

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2. Steady and predictable growth
NXT has proven over time that it can
grow EBITDA. Even with equity raises, Figure 7: NXT has continued to grow EBITDA over time
the stock has continued to grow its
1000 60%
EBITDA per share. We think NXT has a
first-mover advantage in the space and
can continue to grow EBITDA over the 800
55%
medium-term.

3rd generation assets S3 (now online) 600

and M3 (online in late 1H23) should be 50%
key drivers of growth in FY23. NXT has 400
built capacity of 114MW but has planned
capacity of 441MW over the long-term. 45%
This should support long-term growth. 200

There are also opportunities for NXT to

0 40%
grow outside of Australia, with Singapore
FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E FY25E
being touted as a possible destination
for more growth. A recent resumption Data centre services revenue $ (LHS) Underlying EBITDA $ (LHS)
of data centre construction in Singapore EBITDA margin % (RHS)
could open new opportunities for NXT. Source: Refinitiv, Wilsons.

3. Recurring revenue with cost Figure 8: NXT valuation vs peers

pass-throughs

NXT has a sticky recurring revenue profile EV/EBITDA (x) EBITDA

Company Name CAGR
(over 95% recurring revenue); therefore, FY23 FY24 FY25 (FY23-25)
management has earnings visibility as
these are long-dated contracted (3,5 or NextDC 27.4x 23.1x 18.8x 21%
10 years long, with options thereafter). Data Centre Comps

Costs (including energy costs) should be Digital Realty Trust* 19.2x 17.7x 16.3x 9%
passed on to customers via pass-through
Equinix* 20.0x 18.2x 16.4x 10%
mechanisms in contracts, so margin
compression is a low risk for NXT. Macquarie Telecom 15.6x 13.5x 12.7x 11%

4. High margin at scale Group Average 17.8x 16.4x 15.1x 9%

Other Infra Comps

At scale, NXT’s data centres have
exceptional EBTIDA margins. M1 and Atlas Arteria* 33.8x 29.0x 20.1x 30%
S1 (Melbourne’s and Sydney’s first NXT
Transurban 24.3x 21.9x 20.2x 10%
data centres) generate EBITDA margins
of ~80%. Qube Holdings 15.2x 14.2x 13.3x 7%

For new sites, cost growth will initially
outstrip revenue growth, but once
operational, the first data centres (S1 and
M1) reached breakeven by 7-11 months.
We continue to expect group-level
margin expansion as NXT scales further.
5. Valuation multiples high but looks
reasonable versus peers
Our analysts have NXT at a price target
of $11.55, which implies an expected
return of ~17% at the close on Monday.
NXT is trading at a slight EV/EBITDA
premium to its closest peer Equinix, but
NXT’s 3-year EBITDA compound annual
growth rate (CAGR) is more than double
Goodman Group 19.3x 17.7x 15.9x 10%
Group Average 19.4x 17.8x 17.3x 6%
*Dec year end's use a pro rated average to make them comparable.
Source: Refinitiv, Wilsons
Equinix’s (19% vs 9%), which reflects both Wilsons coverage
the higher growth trajectory and the
smaller scale of NXT vs Equinix.
Our analysts discussed NXT’s most
recent results.
In the US, data centres are considered
Read Rock Steady, No Doubt. FY23e
to be infrastructure stocks. If we also
Guidance In-line with Expectations.
look at NXT against other ASX-listed
infrastructure peers (which we think are
also appropriate peers), the stock has
a slight premium to these names but
significantly higher growth. Therefore,
we believe NXT looks well-priced and
potentially oversold.

6
Other Changes to the Focus List
Adding to ResMed (RMD) +1%
After adding RMD to the Focus List
at the beginning of last month, we
decided to increase our weighting after
a good FY22 result and a weak price
performance in August.
For the Focus List, RMD:
• Increases quality to the portfolio
(dominant market position after the
Phillips recall).
• Lowers the beta (relatively
defensive earnings).
• Increases earnings growth
(higher expected growth but higher
earnings multiple).
Our analysts recently upgraded their
view on RMD to overweight.
Read Upgrade O/W: An S9 in an
AS10’s clothing
7
Removing Judo Bank (JDO) -1%
When we added JDO, we believed that
there was a good runway for growth to
build its loan book in an environment of
robust economic growth and a relatively
cautious RBA.
Over the past 12 months, the RBA has
been more hawkish than we expected,
and economic growth is likely to
slow quicker than expected. In this
environment, we believe it will be hard
to build a loan book at the pace JDO
is guiding towards, and bad debts may
become an issue (more of an issue than
the big 4 banks).
We have removed JDO as it is also
leveraged to the domestic economy
and we have a preference to quality over
cyclicals over the next 12 months.
Trimming BHP Group (BHP) -2%
Since the beginning of the year, the
Focus List has been underweight iron
ore miners. We continue to believe the
fundamentals for iron ore (and
the miners that produce it) are skewed
to the downside over the medium-term.
Therefore, we decided to decrease
our weighting to BHP to go
more underweight.
We recently discussed our views on
iron ore.
Read Iron Ore: Risk Remains to
the Downside
Focus on the Reporting Season
Overall the Focus List had more beats
than misses in reporting season. We
assess that 61% of Focus List results
(by portfolio weight %) were inline with
consensus forecasts (15 companies),
28% outperformed expectations
(9 companies), and 12% disappointed the
market (4 companies).
Figure 9: The Focus List had a low
percentage of misses by weighting
Miss
Beat
Inline
0% 20% 40% 60%
AEQ Focus List weighted outcomes
Source: Refinitiv, Wilsons.
8
What we liked
Qantas (QAN) (Focus List 4%)
QAN’s full year result was well received
by the market, which was positioned
somewhat cautiously with respect to
QAN heading into the update.
Most notably, in our view, QAN’s recovery
post-COVID remains on track as we had
expected. In FY23, management expects
domestic capacity to hit 101% of FY19
levels, while international capacity is
expected to be 75% of FY19 levels, albeit
with higher fuel costs.
An on-market buy-back of up to $400m
was also announced, reflecting ~5% of
QAN’s market capitalisation on the day
of the result.
Woodside Energy (WDS)
(Focus List 3%)
WDS’s 1HFY22 result was impressive
as the business benefited from higher
production, the contribution from
recently acquired BHP Petroleum assets,
and elevated energy prices.
80%
A dividend of US$109cps was declared,
which is WDS’s largest interim dividend
since 2014. We think the market was
pleased with WDS’s capital management
approach as it paid out ~82% of free cash
flows to shareholders.
Cleanaway (CWY) (Focus List 3%)
CWY announced it would acquire 100%
of Global Renewables Holdings (GRL)
for $168.5m at an FY22A EV/EBITDA
multiple of 7.9x.
Including the full impact of the
associated capital raise, the acquisition is
3.7% EPS accretive on a pro forma FY22
basis, with incremental earnings upside
expected to be realised as additional
capital is deployed into growth projects
targeting a double-digit internal rate of
return (IRR).
We view this as a savvy acquisition that
future-proofs the business (recycling
the future, in our view), EPS accretive
and scales up the business further.
We expect more M&A in the pipeline
with a significant amount of firepower
remaining post the current raising.
Overall, a positive result, with broadly
inline numbers and a value-accretive
acquisition.
What we disliked
Santos (STO) (Focus List 4%)
The market was disappointed on the
capital management front, as STO
announced an interim dividend of
US$7.6cps. This reflected a payout ratio
of ~35% of free cash flows and undershot
consensus expectations of US$10.7cps.
That said, management did announce an
increase in its on-market buyback from
US$250m to US$350m.
We still like Santos as it is poised to
benefit from buoyant energy prices.
James Hardie (JHX) (Focus List 3%)
Management downgraded FY23
guidance to US$730m-US$780m from the
prior range of US$740-US$820m.
The downgrade was driven by a
weakening macro backdrop. Higher input
and freight costs have squeezed margins,
and a softening in housing markets has
created uncertainty around the demand
for construction materials globally.
We believe downgrades were
already effectively factored into JHX’s
share price before the result, meaning
the share price reaction on the day was
relatively muted.
Despite some cyclical headwinds,
we still like James Hardie over the
medium-term, given its large runway
for growth in the fibre cement category
globally and its track record of growing
earnings at a rate above its cost of capital
through the cycle.
Seek (SEK) (Focus List 2.5%)
The market reacted negatively to
the release due to the number of
caveats in the guidance, including that
management expects job ad volume to
remain consistent in FY23 vs FY22 and
for the labour market to remain tight.
Concerns around a potential cyclical
slowdown remain front of mind for
investors and have weighed on the SEK
share price, although we have not seen
any evidence of this to date.
We still like SEK as we think it can
continue to grow earnings strongly even
in a less supportive jobs market, driven
by the continued digitization of ads
(particularly in Asia), the ability to reduce
discretionary costs as required, and new
pricing strategies.
Figure 10: Focus List results summary

2d price
EPS 12mth
change
Company Name Ticker Sector surprise vs fwd EPS Comment
on day of
consensus revisions**
result

Beats

NPAT and EBITDA beat of +7% and +8% vs WILSe. FY23

CSL CSL Healthcare -0.5% -1.0% -3.0%
guidance (ex Vifor) +6% ahead of WILSe .

Operating EPS +24% to 81.3cps (vs prior guidance of +23%

Goodman Group GMG Real Estate 0.7% -1.5% 0.9% and prev +10%, +20%). FY23 guidance for 90.3cps above
cons 98.9cps.

EBITDA inline. EPS of 14.4cps beat cons 14.0cps. DPS of

Communication
Telstra TLS 0.4% 2.3% 1.4% 16.5cps beat cons of 16cps. FY23 EBITDA guidance of
Services
$7.8-8bn vs cons $7.8bn.

Cleanaway Waste U/L EBITDA of $582m above cons of $572m. FY23

Management CWY Industrials 1.8% -3.6% -9.5% guidance ~$650m mid-point a touch soft vs cons ($667m).
Ltd*** But excludes $21m GRL contribution.
Communication
News Corp NWS 10.0% 29.6% -7.1% EPS US$120cps vs 90cps expected, no guidance.
Services

Communication EBITDA of $509m inline. FY23 guidance of $650-590m

Seek SEK -5.0% 2.9% 2.3%
Services above cons of $550, albeit depends on caveats.

Healthco FFO for FY22 was 5.1 cpu, which was ~3% above the most
Healthcare and HCW Real Estate 8.2% 2.7% -10.1% recent guidance of 5 cps and was +18% above initial PDS
Wellness REIT forecasts. FY22 DPS was 7.5 cps in line with PDS guidance.

Judo Capital All prospectus targets exceeded. FY23 guidance

JDO Financials 3.9% 3.8% 3.3%
Holdings unsuprising (NIMs 3+, GLAs >$9bn).

Pinnacle Investment Underlying FY22 NPAT was $78.2m, +16.6% YoY and +1.8%
PNI Financials 8.4% 0.3% 1.5%
Management vs consensus (+0.9% vs. WILSe).

Inline

Cash earnings up 6% to $1.8bn vs 3Q21 largely inline

NAB NAB Financials NA NA 0.3%
with consensus.

EPS slight beat (421 vs cons 407cps). DPS inline at

BHP Group BHP Materials 3.6% 3.3% -2.4% 325cps. Overall, inline but pleasing compared to Rio who
cut dividend.

Westpac WBC Financials NA NA 3.0% Nothing material.

Macquarie Group MQG Financials NA NA 0.6% Nothing material. No explicit guidance.

ANZ ANZ Financials NA NA -0.4% Nothing material.

Mixed result. Revenue beat, U/L EBITDA miss. $400m

Qantas Airways QAN Industrials 13.8% -5.4% na buyback a positive. FY23 recovery on track albeit with
higher fuel costs.
Consumer
Aristocrat Leisure ALL NA NA 1.0% No update.
Discretionary

NPAT of US$337m broadly inline with cons. Fundamentals

Allkem AKE Materials 0.0% 9.3% 0.0%
remain positive.
Woodside Energy
WDS Energy 2.8% 7.0% 7.0% U/L NPAT inline at US$1.82bn, guidance reaffirmed.
Group
Consumer
Lottery Corporation TLC 0.5% 1.9% -6.5% EBITDA of $964m was inline. No explicit guidance provided.
Discretionary

Northern Star U/L EBITDA $1.5bn inline. Production guidance inline.

NST Materials 2.2% -11.9% 3.4%
Resources $300m buyback a bonus.

non-GAAP EPS US$1.49/share was inline. Positive progress

ResMed RMD Healthcare -4.7% 1.8% -3.4%
on C2C stop gap.

9
 1H EBITDA miss due to disruptions ($358m vs cons $404m),
OZ Minerals OZL Materials -4.4% -4.4% -8.0%
but FY production/cost guidance reaffirmed.
Information
Xero XRO NA NA 5.0% Nothing material. FY guidance reaffirmed.
Technology

Consumer DPS of 13cps above cons 9.4cps, EBITDA of $361m inline.

Tabcorp Holdings TAH 11.1% NA 2.5%
Discretionary Strategic update and cost guidance was positive.

Misses

EBITDAX of US$2,731m inline. DPS dissapoints with 35%

Santos STO Energy -4.0% 8.2% 0.8% payout. 1H DPS of US7.6cps below cons 10.7cps. FY cost
guidance maintained.

Insurance profit $586m below guidance. NPAT $347m

-2.8% vs cons. Due to higher peril costs/reserve
IAG IAG Financials -3.3% -30.5% 2.0%
strengthening. FY23 guidance GRP growth mid to high
single digits above cons (4%).

James Hardie JHX Materials -1.1% -0.7% -2.0% Q1 EBIT US$154m vs cons US$162m, guidance downgrade.

Telix Telix reported a 1H22 loss of $70M which was higher than
TLX Healthcare -18.9% NA NA
Pharmaceuticals the market modelled.
*beats/meets/misses a reflection of our best assessment considering on all the relavent variables.
**over last 30 days as of 5/9/2022
***CWY 2d change refers to difference between close on 19 August to 23 August to account for trading halt.
Source: Refinitiv, Wilsons.

Figure 11: Change in Focus List weightings by Wilsons Style

Resources

Banks

Quality Defensive

Structural Growth

-2.5% -2.0% -1.5% -1.0% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5%

Source: Refinitiv, Wilsons. Change in weighting since last month (percentage points)

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Figure 12: Fundamental table for the Focus List

Net Consensus
Dividend Recommendation
Forecast Multiples EPS CAGR % ROE Debt/
Market Cap Yield %
Company Name Ticker Weighting Beta Share Price EBITDA Mean
(US$b)
12mth fwd 12mth fwd (5 = Strong Sell,
(FY1-FY3) 12mth fwd (FY1) (FY1) 1 = Strong Buy)
PE EV/EBITDA

Communication Services

News Corp NWS 2.5% 1.15 25.36 14.6 18.4 6.8 -1% 1% 6% 0.5 2.3

Seek SEK 2.5% 0.77 20.59 7.3 27.7 15.1 8% 2% 14% 1.8 2.4

Telstra TLS 3.0% 0.61 3.94 45.4 23.0 7.6 12% 4% 12% 1.4 2.2

Consumer Discretionary

Aristocrat Leisure ALL 4.0% 1.26 34.58 22.9 18.5 11.2 15% 2% 23% -0.3 2.1

Lottery Corp TLC 3.0% 1.00 4.48 9.9 27.7 16.4 4% 3% 151% 2.9 2.4

Tabcorp TAH 1.0% 1.17 0.95 2.1 23.7 5.5 36% 3% 3% 0.6 2.6

Energy

Santos STO 4.0% 1.93 7.73 25.9 7.0 3.8 9% 5% 19% 0.5 1.8

Woodside Energy WDS 3.0% 1.24 33.65 63.7 7.2 3.9 15% 9% 24% 0.2 2.3

Financials

ANZ ANZ 5.0% 1.16 22.75 67.8 10.4 4% 7% 10% NA 2.7

IAG IAG 3.0% 0.32 4.68 11.5 14.3 9.5 67% 6% 14% NA 2.4

Macquarie Group MQG 6.0% 1.47 177.20 69.0 16.3 26.1 -2% 4% 14% NA 2.4

NAB NAB 8.5% 1.25 30.54 96.4 13.0 9% 5% 11% NA 2.6

Pinnacle Investment
PNI 1.0% 2.19 9.79 1.9 22.9 21.1 13% 3.7% 20% 0.6 2.6
Management

Westpac WBC 6.0% 1.11 21.40 74.7 11.2 12% 6% 8% NA 2.7

Healthcare

CSL CSL 8.5% 0.45 295.99 142.6 34.9 20.7 16% 1% 17% 2.3 2.1

Resmed RMD 3.5% 0.27 32.11 46.5 32.7 22.6 10% 1% 26% -0.3 2.4

Telix Pharmaceuticals TLX 2.0% 2.31 5.85 1.8 0% -153% 1.2 1.9

Industrials

Cleanaway Waste
CWY 3.0% 1.28 2.80 6.2 33.0 11.3 17% 2% 6% 1.8 2.5
Management

Qantas Airways QAN 4.0% 1.38 5.28 9.9 10.5 3.9 2% 1.1 2.1

Information Technology

NEXTDC NXT 2.0% 0.23 10.23 4.7 305.6 25.3 69% 0% 1% 4.7 2.0

Xero XRO 2.0% 1.33 83.37 12.5 160.8 39.4 137% 0% 5% -0.5 2.4

Materials

Allkem AKE 3.0% 1.86 13.20 8.4 9.3 5.0 31% 0% 19% -0.7 2.2

BHP Group BHP 6.0% 0.86 36.74 186.1 8.1 4.0 -16% 9% 35% 0.1 2.5

James Hardie Industries JHX 3.0% 1.55 33.24 14.8 13.4 9.0 9% 4% 46% 0.6 1.9

Northern Star Resources NST 2.5% 0.91 7.38 8.6 17.5 4.8 34% 3% 5% -0.2 1.7

OZ Minerals OZL 2.0% 1.29 25.33 8.5 23.9 10.1 -9% 1% 7% 0.8 2.5

Real Estate

Goodman Group GMG 4.0% 1.01 19.21 36.0 20.1 18.9 12% 2% 11% 0.8 2.0

Healthco REIT HCW 2.0% 0.80 1.78 0.6 24.8 20.9 20% 5% 3% 8.2 2.3

Source: Refinitiv, Wilsons.

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Disclaimer
All figures and data presented in this research are accurate at the date of the report, unless otherwise stated.

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