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

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