Broker Watch

Heroes vs Zeroes. The ASX stocks that have copped the biggest broker upgrades and downgrades

Wed 15 May 24, 12:24pm (AEST)
zero to hero tearing paper to reveal hero
Source: Shutterstock

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Key Points

  • Consumer Discretionary stocks featured heavily in broker upgrades
  • REA Group (REA) and Pro Medicus (PME) were lauded by brokers after recent market updates
  • Super Retail Group (SUL), Sims Group (SGM), and IDP Education (IEL) each copped big cuts to their price targets

Welcome to our weekly review of the biggest broker moves on ASX stocks for the last week.

Consumer stocks featured heavily in broker upgrades, partly due to a slew of trading updates from these companies that also contained positive FY24 guidance updates. Super Retail Group (ASX: SUL) is an interesting one here, given it's FY24 guidance wasn't well received by the market at all – it's share price plunged – but it garnered two broker upgrades (one to BUY).

There was less of a theme among the downgrades, but again, those stocks which provided disappointing trading updates generally drew the ire of the brokers. WA-based mining-tech company Imdex (ASX: IMD) copped a couple, and one of those was to a SELL.

There were also some substantial price target changes, the most notable for Integrated Research (ASX: IRI) (PT⬆️ +44%), but Pro Medicus (ASX: PME) (PT⬆️ +25%) and REA Group (ASX: REA) (PT⬆️ +24%) deserve a special mention here, and also more generally, as they featured in the upgrades list as well. They're also noteworthy as stocks which appear to have substantial upside from their current prices to the brokers' targets.

Going the other way, SUL (PT⬇️ -14%), Sims Group (ASX: SGM) (PT⬇️ -23%), and IDP Education (IEL) (PT⬇️ -30%) each copped big cuts to their price targets.


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.


Broker upgrades since Wednesday 8 May

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

Ainsworth Game Technology (AGI)

Citi

Outperform

Underperform

$1.09

14.7%

Aristocrat Leisure (ALL)

CLSA

Buy

Outperform

$46.90

17.4%

ALS (ALQ)

Morgans

Add

Hold

$15.00

10.1%

ARB Corporation (ARB)

Ord Minnett

Buy

Accumulate

$44.00

12.9%

Bellevue Gold (BGL)

UBS

Buy

Neutral

$2.05

12.3%

Credit Corp Group (CCP)

Macquarie

Outperform

Neutral

$18.32

19.7%

GR Engineering Services (GNG)

Argonaut Securities

Buy

Hold

$2.50

11.1%

JB HI-FI (JBH)

JP Morgan

Overweight

Neutral

$63.00

9.1%

Pro Medicus (PME)

CLSA

Outperform

Underperform

$125.00

10.5%

REA Group (REA)

UBS

Buy

Neutral

$214.00

16.5%

REA Group (REA)

CLSA

Outperform

Sell

$204.00

11.0%

Super Retail Group (SUL)

UBS

Neutral

Sell

$13.00

-3.8%

Super Retail Group (SUL)

CLSA

Buy

Outperform

$15.50

14.7%

Broker upgrades since Wednesday 8 May

From the brokers:

Ord Minnett upgrades ARB Corporation (ASX: ARB) to BUY from ACCUMULATE

  • PT⬆️ $44 vs $42.50 previous

  • "ARB provided a positive 3Q24 trading update with sales up 6.4% in the period, compared with 1H24 sales growth of 0.2%. All segments reported growth, with Export sales up for the first time in 18 months. The outlook is improving, and favourable trading conditions are anticipated to persist through to FY25."

UBS upgrades Bellevue Gold (ASX: BGL) to BUY from NEUTRAL

  • PT⬆️ $2.05 vs $2.00 previous

  • "We upgrade BGL to Buy rated (A$2.05/sh) after updating with the 1.5mtpa plant expansion in our base case."

Macquarie upgrades Credit Corp Group (ASX: CCP) to OUTPERFORM from NEUTRAL

  • PT$18.32 unchanged

  • "The recent share price performance has seen expectations for CCP de-rate to an attractive level. Based on Macquarie FY25 forecasts, CCP is trading at a 24% discount to its long term PE multiple."

Broker downgrades since Wednesday 8 May

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

Aussie Broadband (ABB)

Ord Minnett

Accumulate

Buy

$4.19

15.7%

Ainsworth Game Technology (AGI)

Macquarie

Neutral

Outperform

$1.10

15.8%

ANZ Group (ANZ)

Morgan Stanley

Equal-Weight

Overweight

$27.70

-1.1%

Fleetpartners Group (FPR)

Macquarie

Neutral

Outperform

$3.60

7.8%

IDP Education (IEL)

UBS

Neutral

Buy

$17.65

11.1%

Iluka Resources (ILU)

JP Morgan

Neutral

Overweight

$8.20

7.2%

Imdex (IMD)

Jarden

Neutral

Overweight

$1.95

-5.3%

Imdex (IMD)

Bell Potter

Sell

Hold

$1.60

-22.3%

Lithium Energy (LEO)

Jarden

Sell

Neutral

$0.43

-79.1%

Orica (ORI)

Jarden

Overweight

Buy

$18.55

1.3%

Sims (SGM)

RBC Capital Markets

Underperform

Sector Perform

$10.75

0.2%

Broker downgrades since Wednesday 8 May

From the brokers:

Morgan Stanley downgrades ANZ Group (ASX: ANZ) to EQUAL-WEIGHT from OVERWEIGHT

  • PT⬇️ $27.70 vs $27.90 previous

  • "We downgrade to EW given ANZ has a range of strategic priorities to juggle, EPS upgrades will be hard to come by, and trading multiples are fair"

UBS downgrades IDP Education Group (ASX: IEL) to NEUTRAL from BUY

  • PT⬇️ $17.65 vs $25.30 previous

  • "While we believe a large degree of negativity is already incorporated in IEL's share price, we think recent developments extend the duration of uncertainty, which could prolong share price recovery and negatively impact earnings as students wait for better visibility on the outlook"

Biggest broker price target changes since Wednesday 8 May

Company

Broker

Rating

New PT

Old PT

PT Change%

PT Upside%

Integrated Research (IRI)

Bell Potter

Buy

$0.95

$0.66

43.9%

20.3%

Pro Medicus (PME)

CLSA

Outperform

$125.00

$100.00

25.0%

10.5%

REA Group (REA)

CLSA

Outperform

$204.00

$164.00

24.4%

11.0%

Pinnacle Investment Management (PNI)

Ord Minnett

Buy

$16.00

$13.00

23.1%

24.9%

Fleetpartners Group (FPR)

Morgan Stanley

Overweight

$3.90

$3.20

21.9%

16.8%

Lotus Resources (LOT)

Bell Potter

Buy

$0.60

$0.50

20.0%

33.3%

Fleetpartners Group (FPR)

Macquarie

Neutral

$3.60

$3.01

19.6%

7.8%

REA Group (REA)

Jefferies

Hold

$200.45

$171.51

16.9%

9.1%

REA Group (REA)

UBS

Buy

$214.00

$184.00

16.3%

16.5%

Goodman Group (GMG)

Ord Minnett

Sell

$24.00

$20.85

15.1%

-28.3%

Orica (ORI)

Morgan Stanley

Overweight

$21.50

$19.00

13.2%

17.4%

Life360 (360)

Goldman Sachs

Buy

$16.05

$14.20

13.0%

7.4%

Alpha HPA (A4N)

Bell Potter

Buy

$1.95

$1.75

11.4%

103.1%

Orica (ORI)

Jefferies

Buy

$20.80

$18.80

10.6%

13.6%

Wisetech Global (WTC)

UBS

Buy

$112.00

$102.00

9.8%

14.8%

Life360 (360)

Ord Minnett

Buy

$16.68

$15.20

9.7%

11.6%

REA Group (REA)

Macquarie

Neutral

$196.00

$179.00

9.5%

6.7%

ALS (ALQ)

Morgans

Add

$15.00

$13.70

9.5%

10.1%

Life360 (360)

Bell Potter

Buy

$17.75

$16.25

9.2%

18.7%

Orica (ORI)

JP Morgan

Overweight

$20.70

$19.00

8.9%

13.1%

Platinum Asset Management (PTM)

Bell Potter

Buy

$1.10

$1.20

-8.3%

3.8%

Imdex (IMD)

Bell Potter

Sell

$1.60

$1.75

-8.6%

-22.3%

Arcadium Lithium (LTM)

Bell Potter

Buy

$9.50

$10.40

-8.7%

34.4%

Ainsworth Game Technology (AGI)

Citi

Outperform

$1.09

$1.24

-12.1%

14.7%

Seven West Media (SWM)

Goldman Sachs

Sell

$0.21

$0.24

-12.5%

7.7%

Sims (SGM)

Jarden

Neutral

$12.10

$14.00

-13.6%

12.8%

Super Retail Group (SUL)

Macquarie

Neutral

$13.80

$16.00

-13.8%

2.1%

Sims (SGM)

Morgan Stanley

Underweight

$10.00

$12.00

-16.7%

-6.8%

Fletcher Building (FBU)

Goldman Sachs

Neutral

$3.05

$3.70

-17.6%

10.9%

Sims (SGM)

Macquarie

Outperform

$13.00

$16.00

-18.8%

21.2%

Baby Bunting Group (BBN)

Macquarie

Neutral

$1.40

$1.74

-19.5%

-1.4%

Fletcher Building (FBU)

Macquarie

Underperform

$2.56

$3.23

-20.7%

-6.9%

Fletcher Building (FBU)

Morgan Stanley

Equal-Weight

$2.84

$3.67

-22.6%

3.3%

Sims (SGM)

RBC Capital Markets

Underperform

$10.75

$14.00

-23.2%

0.2%

Ainsworth Game Technology (AGI)

Macquarie

Neutral

$1.10

$1.45

-24.1%

15.8%

Lithium Energy (LEO)

Jarden

Sell

$0.43

$0.60

-28.3%

-45.6%

IDP Education (IEL)

UBS

Neutral

$17.65

$25.30

-30.2%

11.1%

Curvebeam AI (CVB)

Bell Potter

Buy

$0.33

$0.55

-40.0%

73.7%

Paradigm Biopharmaceuticals (PAR)

Bell Potter

Buy

$0.47

$1.40

-66.4%

67.9%

Biggest broker price target changes since Wednesday 8 May

From the brokers:

Bell Potter raises PT⬆️ on Integrated Research (ASX: IRI) to $0.95 from $0.68

  • Rating BUY

  • "On the back of the positive update and guidance we have increased the multiples we apply in the PE ratio and EV/EBITDA valuations...We note the outlook for the stock is positive given the solid pipeline of new opportunities, the renewal pipeline in FY25 is similar to FY24 (and includes JPMC) and the growing cash levels."

Ord Minnett raises PT⬆️ on Pinnacle Investment Management (ASX: PNI) to $16 from $13

  • Rating BUY

  • "PNI’s Apr-24 update was ahead of our expectations, with flow momentum the best in over two years. Meanwhile, the prospect of a new, wellcredentialed global equities Affiliate adds some excitement to the longer term story."

Bell Potter cuts PT⬇️ on Paradigm Biopharmaceuticals (ASX: PAR) to $0.47 from $1.40

  • Rating BUY (SPECULATIVE)

  • "The key driver of the valuation revision is the inclusion of further shareholders equity over the course of FY25/26 required for funding of the two Phase 3 trials. Following numerous delays to the commencement of these approval studies"

 

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience and has helped investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.

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