MoneyTalks: Acusensus in for big rise as it prepares to capture global markets, says broker
Canaccord sees Acusensus’s share price doubling, as the road safety tech producer sets out to capture a bigger slice of a $1.8 billion global market.
MoneyTalks is Stockhead’s regular recap of the ASX stocks, sectors and trends that fund managers and analysts are looking at right now.
Canaccord sees Acusensus’s share price doubling, as the road safety tech producer sets out to capture a slice of a $1.8 billion global market.
The broker has rated Acusensus (ASX:ACE) a Buy, with a price target of $1.30 (versus its price on Tuesday morning of $0.65c).
Acusensus is a $100 million market capped company that specialises in road safety solutions, particularly in areas such as detecting and deterring distracted driving, and monitoring traffic violations.
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The company’s flagship is the Heads-Up product, designed to detect illegal use of mobile phones while driving.
But the product suite has now evolved into a comprehensive, multi-solution offering which supports speed (average and point), seatbelt noncompliance, and licence plate-based detection and enforcement.
“We believe ACE is in the early stages of its global expansion, leveraging its patented technology to capture the $1.8 billion global market opportunity,” said the note from Canaccord.
In the last update, ACE provided guidance that it expected to deliver FY24 revenue of $49-51 million, a 20 per cent increase from FY23 and a huge lift from $7 million in FY21.
ACE currently generates around 6 per cent of revenues from international markets, and is highly focused on capturing the much larger opportunity.
The company’s cost base has been realigned to ready the business for large contracts across three continents.
“While inevitably slow to be awarded, given these are government contracts, we expect success in the next six months across its three global markets (UK, Europe, US) coupled with new contract announcements in Australia to aid FY25 revenues and drive material operating leverage within the business,” said Canaccord.
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“There are few ASX-listed stocks exposed to the AI evolution, and on an enterprise value of $100 million, we believe this under-represents the size of the existing opportunity and the strength of ACE’s position.”
Cooper Energy upgraded
Meanwhile, Jarden Research has upgraded Cooper Energy (ASX:COE) from Underweight to Neutral, with a 12-month price target of 19c (versus Tuesday’s price of 15.5c).
Cooper is a $420 million market capped Australian gas and oil producer focusing on domestic markets.
Jarden upgraded COE after the company announced good progress in its cost-out program and Orbost production performance.
Cooper recently said decommissioning of the Basker Manta Gummy (BMG) oil/gas fields would be completed in late March or early April.
Cooper stated that, other than some lost time due to weather, it remained well on track to complete the program within the revised $240-280 million cost estimate.
Jarden said COE had made good progress in reducing its production expenses and general costs.
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“The annualised run-rate of the cost-out program as at January 2024 was about $8 million per annum, and COE has outlined plans to increase this cost-out target to $16 million p.a. run-rate by end-FY24,” said Jarden.
At the Orbost gas processing plant, which transports gas into the NSW and Victoria markets, Cooper has been working through options to achieve higher average rates since taking over operatorship in May last year.
In the most recent update, Cooper reported that ongoing signs of sustained performance improvement was evident at Orbost, with average production rates since the start of the year of 55.2 TJ/d versus the 47.4 TJ/d average rate in the last half.
“As a sensitivity, a sustained increase to 60 TJ/d would increase our valuation by a further 1 cent per share,” said the note from Jarden.
Jarden said the key risk for investors remained the execution of the BMG abandonment program within the $240-280 million targeted budget by early May 2024.
“But, with solid progress now being made to date, we are increasingly optimistic COE can meet this objective,” Jarden said.
This content first appeared on stockhead.com.au
The views, information, or opinions expressed in this article are solely those of the brokers and do not represent the views of Stockhead. Stockhead has not provided, endorsed or otherwise assumed responsibility for any financial product advice contained in this article.
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