Big brokers choose October's biggest ASX winners and losers

Welcome back to our weekly check up on the biggest moves from the biggest brokers covering ASX stocks. Note this edition covers the last two weeks since Thursday 3 October. Here's a quick summary of the stocks that grabbed the brokers' attention over the last couple of weeks:

Baby bouncing back?

Baby Bunting Group (BBN) share price chart

Baby Bunting Group (ASX: BBN) held its AGM this week with most brokers liking what they heard. The stock received one rating upgrade to ACCUMULATE from HOLD at Ord Minnett as well as two +10% price target increases (+34% to $2.15 at Ord Minnett and +10% to $1.98 at NEUTRAL rated Citi)

Gold, gold, gold!

Genesis Minerals (GMD) share price chart

Genesis Minerals (ASX: GMD) reported strong quarterly production numbers and confirmed a FY25 production increase was on track following the successful restart of its Laverton Mill. Ord Minnett upgraded GMD to ACCUMULATE from HOLD and increased its price target for the stock by 17.5% to $2.35. There were several other gold stocks featuring in broker updates over the last two weeks, with substantial price target increases for the likes of Regis Resources (ASX: RRL), Pantoro (ASX: PNR), St Barbara (ASX: SBM), Alkane Resources (ASX: ALK), Northern Star Resources (ASX: NST), and Evolution Mining (ASX: EVN).

Gold prices have been rising steadily in 2024, and this has triggered a big rally in the prices of many ASX gold explorers and producers. So, whilst brokers were generally tweaking target prices in the sector higher, the view among some of them was that valuations in certain stocks have grown less attractive. Here, EVN received two rating downgrades (NEUTRAL from BUY at Goldman Sachs and HOLD from ACCUMULATE at Ord Minnett), PNR was cut to HOLD from BUY at Bell Potter, and high flyer RRL was dropped to SELL from NEUTRAL at Goldman Sachs.

Bitter-sweet for wealth platforms

Hub24 (HUB) share price chart

The chart above for Hub24 (ASX: HUB) tells the story. Wealth platforms are akin to gold mining of a different kind! HUB provided a strong market update in which it announced record net fund inflows in the September quarter of $4 billion, up 44% on the same period last year.

Brokers unanimously acknowledged the result was ahead of their forecasts, but they also generally acknowledged that HUB's share price no longer represented attractive value. This resulted in HUB receiving two rating downgrades (UNDERPERFORM from HOLD at Jefferies and ACCUMULATE from BUY at Ord Minnett). At the same time, brokers had no choice but to significantly jack up their target prices for the stock, with UBS logging the greatest increase - a massive 62% to $66.50.

Netwealth Group (ASX: NWL) also released its September quarter update, and it also reported a record period of fund inflows - coincidentally $4 billion - but this time up 93.5% on the previous corresponding period. NWL also received the same treatment from the brokers, several big target price increases to reflect the stock's strong share price performance, but two rating downgrades (HOLD from ACCUMULATE at Ord Minnett and NEUTRAL from BUY at UBS).

Lithium unloved

Arcadium Lithium (LTM) share price chart

Rio Tinto's (ASX: RIO) takeover of Arcadium Lithium (ASX: LTM) certainly set the cat among the pigeons in the ASX lithium sector. It triggered a recovery in most lithium names, not to mention a massive spike in LTM's share price as per the chart above. Brokers generally had two responses to the takeover as far as LTM's ratings and target prices were concerned: Cut the rating to HOLD (after all the price is trading near enough to the takeover price and the deal is all but done), and raise target prices to reflect the gain in LTM's share price.

The RIO-LTM news, as well as the share price changes it triggered across the sector, drew attention to several other lithium names. The results were generally not good, with rating downgrades for IGO (ASX: IGO) (UNDERWEIGHT from NEUTRAL at JP Morgan), Mineral Resources (ASX: MIN) (NEUTRAL from OVERWEIGHT at Macquarie and JP Morgan), and Liontown Resources (ASX: LTR), Piedmont Lithium (ASX: PLL), Core Lithium (ASX: CXO), and Global Lithium Resources (ASX: GL1) each going to UNDERPERFORM from NEUTRAL at Macquarie.

Price target cuts were also rife within the sector, with brokers cutting by as much as 30% in the case of LTR (JP Morgan to $0.45).

Losing energy

Woodside Energy Group (WDS) share price chart

Like lithium stocks, energy stocks have also been sagging on weaker commodity prices. This set many up for some harsh treatment from the major brokers over the last couple of weeks. Here I note rating downgrades for Ampol (ASX: ALD) (NEUTRAL from BUY at Bank of America), APA Group (ASX: APA) (SELL from NEUTRAL at UBS), and Woodside Energy Group (ASX: WDS) (NEUTRAL from OUTPERFORM at Macquarie).

Each of these stocks also saw significant price target cuts, as did counterparts Santos (ASX: STO), Karoon Energy (ASX: KAR), Beach Energy (ASX: BPT), Cooper Energy (ASX: COE), Coronado Global Resources (ASX: CRN), and Stanmore Resources (ASX: SMR). The biggest target price cuts were applied to CRN (-19.4% to $1.25 at Ord Minnett), WDS (-18.3% to $27 at Macquarie), and APA (-18% to $6.60 at UBS).

WEB's crash landing

WEB Travel Group (WEB) share price chart

WEB Travel Group (ASX: WEB) takes out the dubious honour of most rating downgrades and severe target cuts. It reported weakness in its European operations and higher costs would likely take a sizeable chunk from group margins in FY25. In response, investors slashed the company's share price from just over $7 prior to the announcement to under $4.50.

Rather than seeing the dip as a buying opportunity, Citi chose to downgrade its rating for WEB to NEUTRAL from BUY and Morgans downgraded to HOLD from ADD. Price target cuts were far more sweeping, with a record (well as far as I can remember in these updates!) 10 substantial target price cuts. The most severe cut was applied by Morgans (-39% to $5.25) but five other brokers also saw fit to cut their targets by over 30% (Shaw and Partners, Ord Minnett, Macquarie, CLSA, and Citi)

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There are plenty of other interesting broker moves for the period, and keep scrolling because we have summarised the major moves in the tables below. Remember, you can only get this level of detail on what brokers up to from us – so let’s dive in!

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Broker upgrades since Thursday 3 Oct

Biggest broker rating upgrades since Thursday 3 Oct. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 16 Oct.

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Broker downgrades since Thursday 3 Oct

Biggest broker rating downgrades since Thursday 3 Oct. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 16 Oct.

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Biggest broker price target increases since Thursday 3 Oct

Biggest broker price target increases since Thursday 3 Oct. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices as on Wednesday 16 Oct.

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Biggest broker price target cuts since Thursday 3 Oct

Biggest broker price target cuts since Thursday 3 Oct. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices as on Wednesday 16 Oct.

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How to read broker recommendations 🔎

Typically, there are two major components of a broker’s view:

Rating: A call to action, usually along the lines of buy, hold, or sell, but depending on the broker’s ratings system, can be somewhere in between (e.g., accumulate or add is typically between a hold and a buy).

Price target (PT): The price at which the broker expects the stock will be trading at some point in the future, generally within the next 12 months.

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