Cost of Living Data Suggest Consumer, Financial Services Stocks Likely to Benefit

This report is an updated version of the report published on 2 May 2024 at 3:40 pm AEST.

Company Overview

Company Overview: Tyro Payments Limited (ASX: TYR) is an Australia-based technology-driven company, involved in providing payment solutions and business banking products to Australian businesses. The Star Entertainment Group Limited (ASX: SGR) is an ASX-listed company that offers gaming, entertainment, and hospitality services. It runs The Star Sydney in Sydney, The Star Gold Coast in Gold Coast, and Treasury Brisbane in Brisbane. Additionally, it oversees the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government. Kalkine’s Sector Report covers the Investment Summary, Sector Overview & Supporting Catalysts, Data Insights & Analysis, Financial Metrics, Financial Commentary, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on selected stocks.

Investment Summary

Sector Overview and Supporting Catalysts

Data Insights and Analysis

Index Performance

Key Drivers versus Key Constraints

Investment theme and stocks under discussion (TYR, SGR)

After understanding the economic factors, let us now look at two companies from the Consumer & Financials Services Sectors. The price potential of the companies under discussion have been analysed based on the Price/Book & EV/Sales valuation multiples method, respectively.

1. ASX: TYR (Tyro Payments Limited)

(Recommendation: ‘Speculative Buy’ at AUD 0.9025, Potential Upside: Low Double-Digit, Mcap: AUD 487.37mn)

TYR is an Australia-based technology-driven company, involved in providing payment solutions and business banking products to Australian businesses.

2.ASX: SGR (The Star Entertainment Group Limited)

(Recommendation: ‘Speculative Buy’ at AUD 0.400, Potential Upside: Low Double-Digit, Mcap: AUD 1.14bn)

SGR is an ASX-listed company that offers gaming, entertainment, and hospitality services. It runs The Star Sydney in Sydney, The Star Gold Coast in Gold Coast, and Treasury Brisbane in Brisbane. Additionally, it oversees the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 2 May 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock.

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock.

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

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