The ASX 200 stocks attracting the biggest broker upgrades: Paladin Energy, Ansell

Morgan Stanley entered the ASX uranium space last week, initiating coverage of the two biggest names – Paladin Energy (ASX: PDN) and Boss Energy (ASX: BOE).

The analysts had a preference for Paladin Energy, citing an easier asset restart, stronger sales contract position and a firmer growth pipeline over Boss Energy. Some of their key takeaways include:

• Paladin's Langer Heinrich Project has a more defined resource than Boss' Honeymoon Project

• Langer Heinrich has de-bottlenecking initiatives aimed at improving performance as opposed to Honeymoon's restart with a new flowsheet

• Paladin has 50% of its estimated 2025 sales contracted, whereas Boss only has 6%

• Paladin operates the Michelin Uranium Project in Canada, which alongside Langer Heinrich could make the company a sizeable uranium player

The initiation had an Overweight rating on Paladin Energy with a $1.75 target price and EQUAL-WEIGHT rating on Boss Energy with a $4.60 target price.

Note: On Tuesday, 9 April 2024, shareholders of Paladin Energy approved a 10-1 consolidation. The stock is currently trading under PDNDA until Monday, 22 April 2024.

Biggest ASX 200 Upgrades

'Target price' is an aggregate of Refinitiv broker target prices. % Dif compares target prices between Friday, 5 April and Friday, 12 April 2024

Ansell (ASX: ANN) completed a $400 million raise last week to acquire Kimberly-Clark's Personal Protective Equipment (KCPPE) division. The new shares were issued at $22.45 or a 6.0% discount to the last close on 5 April 2024.

Analysts were universally bullish on the takeover, with expectations that it could reshape the company's scale and breadth in life sciences and cleanroom solutions (gloves, disposable garments, masks etc) as well as geographic diversification (KCPPE generates approximately 70% of revenues from North America compared to Ansell's 42%).

Source: Macquarie Research

Despite the complexities and risks associated with integrating KCPPE during this transformative phase for Ansell, analysts expect to see a positive surprise against current forecasts. These expectations are fuelled by the promised restructuring savings, supply chain synergies and improved margins.

Ansell shares traded 6.5% higher to $24.43 post-capital raise to levels not seen since July 2023. The close represents a 17.0% gain for the new shares issued under the $400 million cap raise.

Ansell 12-month price chart (Source: Market Index)