Broker Watch

ASX upgrades and downgrades: REA, Appen and reporting season plays

Wed 10 Aug 22, 2:34pm (AEDT)
Stock market screen with red and green price changes
Source: iStock

Key Points

  • Appen downgraded to a Sell as earnings turnaround timing remains uncertain
  • REA Group downgraded to Neutral amid unsurprisingly housing market slowdown

Market Index provides regular updates for the latest broker upgrades and downgrades for ASX companies. 

Upgrades

Reece (ASX: REH)

  • Macquarie upgrades to Neutral from Underperform with $15.80 target price

  • A strong sales pipeline and surging US dollar to support near-term earnings. High prices for building parts could impact demand for detached housing segment in Australia

Downgrades

Appen (ASX: APX)

  • Bell Potter downgrades to Sell from Hold with $4.25 target price

  • Analysts do not expect any surprises for first-half results given pre-released earnings last week. FY23-24 forecasts do assume a rebound in digital advertising and customer spend, but the timing and extent of this turnaround remains uncertain

Bendigo & Adelaide Bank (ASX: BEN)

  • Macquarie downgrades to Underperform from Neutral with $10.00 target price

  • Analysts expect margin tailwinds to normalise and underperform relative to large cap peers such as National Bank

Boral (ASX: BLD)

  • Macquarie downgrades to Neutral from Outperform with $3.20 target price (from $4.05)

  • Analysts warn of downside risks in the second-half of 2022 including adverse weather conditions in the east coast and persistently high energy costs

Beach Energy (ASX: BPT)

  • Morgans downgrades to Hold from Add with $1.91 target price (from $1.95)

  • Analyst expressed concerns that production guidance for FY23 might be lackluster

City Chic Collective (ASX: CCX)

  • Citi downgrades to Neutral from Buy with $2.47 target price

  • The investment bank warns of weaker-than-expected website traffic and lowered its FY23-24 earnings forecasts by 3%. Slower growth and ongoing valuation compression for growth stocks weakens share price outlook

GWA Group (ASX: GWA)

  • Macquarie downgrades to Neutral from Outperform with $2.15 target price (from $3.30)

  • Analysts warn that deteriorating economic and property market conditions could weaken demand for GWA's building fixtures and fittings. FY23-24 earnings downgraded by -6% and -14% respectively

REA Group (ASX: REA)

  • UBS downgrades to Neutral from Buy with $142.60 target price

  • The investment bank forecasts a 10-15% decline in house prices and expects a notable decline in property listings for major cities Sydney and Melbourne. Lower property listings expected to weigh on earnings

 

Written By

Kerry Sun

Content Strategist

Kerry holds a Bachelor of Commerce from Monash University. He is an avid swing trader, focused on technical set ups and breakouts. Outside of writing and trading, Kerry is a big UFC fan, loves poker and training Muay Thai. Connect via LinkedIn or email.

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