MoneyTalks: Acusensus could rise much higher as it prepares to capture global markets, says broker

Acusensus to capture opportunities in global markets, says Canaccord
Cooper Energy upgraded by Jarden after cost-out announcement

Acusensus on the verge of global expansion

Canaccord has rated Acusensus (ASX:ACE) a Buy, with a price target of $1.30 (versus current price of $0.78c).

Acusensus is a $100m market capped company that specialises in road safety solutions, particularly in areas such as detecting and deterring distracted driving and monitoring traffic violations.

The company’s flagship is the Heads-Up product, which was 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 non-compliance, 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 expects to deliver FY24 revenue of $49-51m, a big 20% increase from FY23 and the $7m in FY21.

ACE currently generates around 6% 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, USA) coupled with new contract announcements in Australia to aid FY25 revenues and drive material operating leverage within the business,” said Canaccord.

“There are few ASX-listed stocks exposed to the AI evolution, and on an enterprise value of $100m, we believe this under-represents the size of the existing opportunity and the strength of ACE’s position.”

Cooper Energy upgraded on cost-out, potential for Orbost

Meanwhile, Jarden Research has upgraded Cooper Energy (ASX:COE) from Underweight to Neutral, with a 12-month price target of 19c (versus current price of 16c).

Cooper is a $420m market capped Australian gas and oil producer focusing on domestic markets.

Jarden has upgraded Cooper after the company announced good progress in its cost-out programme and Orbost production performance.

Cooper recently said the decommissioning of the Basker Manta Gummy (BMG) oil/gas fields will be completed in late March or early April. Cooper stated that, other than some lost time due to weather, it remains well on track to complete the programme within the revised $240-280m cost estimate.

Jarden says COE has made good progress in reducing its production expenses and general costs.

“The annualised run-rate of the cost-out programme as at January 2024 was ~$8m p.a, and COE has outlined plans to increase this cost-out target to $16m 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 of the plant in May 2023.

In the most recent update, Cooper reported that ongoing signs of sustained performance improvement is evident at Orbost, with average production rates since the start of the year of 55.2 TJ/d vs 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 says the key risk for investors remains the successful execution of the BMG abandonment programme within the $240-280m 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.