Here are the ASX 200 stocks with the biggest downside to analyst targets in August
Reece, Fortescue and Commonwealth Bank have the biggest downside vs. consensus target prices.
Source: iStock
Mentioned
KEY POINTS
- Reece, Fortescue and Commonwealth Bank have the largest downside against broker targets
- Stocks from bullish sectors such as Utilities, Tech and Insurance are giving price targets a run for their money
- Magellan and Invocare have joined the top ten downside stocks this week
Wisetech Global (ASX: WTC) has hit a fresh weekly all-time high in 12 of the past 17 weeks – at the same time, its consensus target price has remained stagnant around $70 to $75. That’s a lot of all-time highs foregone if you listened to analyst price targets.
The same can be said for a few other sectors that have found a lot of success this year including:
Utilities such as AGL (upbeat outlook for electricity prices and earnings)
Building and Construction such as Boral and James Hardie (building materials shortage and price inflation, resilient construction market)
Insurance such as IAG (hiking cycle is generally positive for insurer earnings and premiums growth)
Stocks with the most downside to consensus
Ticker | Name | Sector | Close Price | Target price | Return |
|---|---|---|---|---|---|
Reece | Industrials | $19.30 | $14.83 | -23.2% | |
Fortescue | Materials | $21.98 | $18.28 | -16.8% | |
Commonwealth Bank | Financials | $105.85 | $89.47 | -15.5% | |
Wisetech Global | Technology | $86.54 | $73.34 | -15.3% | |
REA Group | Communications | $158.22 | $134.91 | -14.7% | |
Domain Holdings | Communications | $4.14 | $3.56 | -14.0% | |
Invocare | Discretionary | $12.19 | $10.61 | -13.0% | |
Boral | Materials | $4.40 | $3.87 | -12.0% | |
Magellan | Financials | $9.52 | $8.54 | -10.3% | |
Xero | Technology | $123.88 | $111.41 | -10.1% |
‘Target price’ reflects an aggregate of all target prices within Refinitiv’s data base as at 02/08/2023. Close price as at 01/08/2023 close (Table: Market Index | Source: Refinitiv)
What’s changed vs. last week
Reece, Fortescue and CBA remained in the top four
The downside for tech names (Wisetech, REA, Xero) have widened as target prices remained steady but share prices continued to trend higher – Either the analysts are right and the stocks are due to come back to earth or the AI-hype is real
New entrants
Invocare – Shares in the funeral services provider fell 3.8% on 18 July after providing an update about its non-binding and indicative proposal from TPG Capital (which offers to acquire all issued capital at $13.00 per share). The company says its working with TPG towards entry into a scheme implementation deed. Does the price target suggest that the deal might not follow through?
Magellan – Magellan shares have gone almost full circle since early July, experiencing both a ~15% fall then bounce. Last month, Macquarie downgraded the stock to an Underperform with the view that “we see the funds management business as overvalued while outflows are likely to persist.”
Honourable mentions
These are the stocks ranked 11-20 for most downside vs. consensus targets.
Ticker | Name | Sector | Close Price | Target price | Return |
|---|---|---|---|---|---|
Costa Group | Staples | $3.30 | $2.97 | -10.0% | |
Pro Medicus | Health Care | $69.02 | $63.29 | -8.3% | |
Washington H Soul Pattinson | Financials | $33.12 | $30.65 | -7.5% | |
ARB Corporation | Discretionary | $31.52 | $29.22 | -7.3% | |
Insurance Australia Group | Financials | $5.96 | $5.54 | -7.0% | |
HMC Capital | Real Estate | $5.19 | $4.84 | -6.7% | |
Netwealth Group | Financials | $14.94 | $13.95 | -6.6% | |
AGL Energy | Utilities | $12.28 | $11.49 | -6.4% | |
James Hardie | Materials | $42.97 | $40.68 | -5.3% | |
Evolution Mining | Materials | $3.79 | $3.59 | -5.3% |
‘Target price’ reflects an aggregate of all target prices within Refinitiv’s data base as at 02/08/2023. Close price as at 01/08/2023 close (Table: Market Index | Source: Refinitiv)
