ASX Upgrades and Downgrades: Rio Tinto, Whitehaven Coal and Wisetech
Almost every major broker has upgraded their Whitehaven target prices after Monday's earnings update
Source: iStock
Mentioned
KEY POINTS
- Most major brokers have upgraded their Whitehaven price targets
- Whitehaven delivered a staggering $3bn earnings in FY22
Market Index provides daily updates for the latest broker upgrades and downgrades for S&P/ASX 200 companies.
Upgrades
Morgans upgraded to Add from Hold - $113 target price
Rating reflects recent share price weakness and expectation that Chinese demand will recover in late 2022 to early 2023
Citi upgraded to Buy from Neutral - $7.85 target price (from $4.90)
Coal prices expected to stay higher for longer thanks to European countries switching back to coal power generation amid Russian gas restrictions
Downgrades
Ord Minnett downgraded to Hold from Buy - $13.25 target price
ANZ's agreement to acquire Suncorp Bank lacks a compelling premium takeover offer. The takeover is still subject to regulatory approval and projected synergies might be difficult to realise
Macquarie downgraded to Underperform from Neutral - $42.00 target price
WiseTech upgraded its FY22 earnings outlook thanks to higher margins but revenue guidance was unchanged. The lack of revenue growth and now lack of margin upside leaves growth and valuations at risk
Other
Several brokers have increased their target price for Whitehaven Coal after the $5.8bn market cap miner said it will deliver $3bn in earnings for FY22.
Credit Suisse retained Outperform rating - $7.60 target price
Macquarie retained Outperform rating - $6.80 target price
Morgan Stanley retained Overweight rating - $7.75 target price
Morgans retained Add rating - $6.70 target price
Whitehaven said it generated $1.4bn in cash for the June quarter, which on an annualised basis, would be worth more than its entire market cap.
Brokers expect record coal prices to generate free cash flow yields of more than 60%, which paves way for more buybacks and/or a special dividend.
