Ann: FY22 Financial Results and Outlook Presentation, page-7

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Friday, 19 August 2022

DRR - DETERRA ROYALTIES LIMITED

Macquarie rates DRR as Outperform (1) - Macquarie observes Deterra Royalties has benefited from the ramp up of South Flank as well as iron ore prices and the ongoing ramp up remains a key catalyst.

The spot price scenario for iron ore is largely in line with expectations over FY23 and FY24 and the broker assesses free cash flow and dividend yields at spot prices will remain above 7% from FY23 onwards.

Macquarie retainsan Outperform rating and an unchanged target of $5.

Target price is $5.00 Current Price is $4.58 Difference: $0.42 If DRR meets the Macquarie target it will return approximately 9% (excluding dividends, fees and charges). Current consensus price target is $4.89, suggesting upside of 6.8%(ex-dividends)The company's fiscal year ends in June.

Forecast for FY23:

Macquarie forecasts a full year FY23 dividend of 40.10 cents and EPS of 40.10 cents . At the last closing share price the estimated dividend yield is 8.76%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 11.42. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 35.3, implying annual growth of N/A. Current consensus DPS estimate is 35.2, implying a prospective dividend yield of 7.7%. Current consensus EPS estimate suggests the PER is 13.0.

Forecast for FY24:

Macquarie forecasts a full year FY24 dividend of 31.80 cents and EPS of 32.40 cents . At the last closing share price the estimated dividend yield is 6.94%. At the last closing share price the stock's estimated Price to Earnings Ratio (PER) is 14.14. How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 32.4, implying annual growth of -8.2%. Current consensus DPS estimate is 31.8, implying a prospective dividend yield of 6.9%. Current consensus EPS estimate suggests the PER is 14.1.

Market Sentiment: 0.6All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources