The ASX 200 stocks attracting the biggest broker upgrades: Premier Investments, Elders
Premier Investments demerger plans and better-than-expected first-half results prompts an uplift in consensus target prices.
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Premier Investments (ASX: PMV) showcased robust first-half FY24 results last week, where disciplined cost management helped drive better-than-expected margins, earnings and dividends.
Chairman Solomon Lew unveiled plans to demerge the company's stationary brand Smiggle by January 2025 and explore a similar move for its sleepwear retailer Peter Alexander. Premier Investments shares finished the session (Tuesday, 26 March) up 4.4%.
Here are some of the key takeaways and numbers from the results:
Sales down 2.8% to $879.5 million and below the $898.5 million consensus
EBIT down 4.8% to $209.8 million but above the $202.2 million consensus
Gross margin of 63.5% and above the 62.7% consensus
Global sales showing improving momentum in the first 8 weeks of 2H24, back in-line with the prior corresponding period
Identified more than 20 additional opportunities for new and larger format stores for Peter Alexander. Also exploring future offshore market opportunities, including the UK
Identified more than 30 opportunities for new stores in existing markets. Also exploring future offshore markets
Analysts responded positively to the results and spinoff intentions, many of which foresee a sustained margin expansion beyond FY24, driven by the sound management of COGS (cost of goods sold) and COBD (costs of doing business). The proposed spinoff garnered optimism, with analysts expecting it to unlock further value and an enhanced focus on core businesses. The stock's average target price has increased 10.8% since last week to $31.59.
Premier Investment 12-month price chart (Source: Market Index)
Biggest ASX 200 Upgrades
Ticker | Company | Close Price | 1-Week | Target Price | Prev Target Price | % Dif |
|---|---|---|---|---|---|---|
Premier Investments | $32.81 | 7.9% | $31.59 | $28.50 | 10.8% | |
Elders | $9.38 | 5.6% | $8.63 | $8.23 | 4.9% | |
Alumina | $1.42 | 11.4% | $1.22 | $1.18 | 3.4% | |
Sandfire Resources | $8.89 | 2.3% | $7.70 | $7.48 | 2.9% | |
Monadelphous Group | $14.18 | 2.5% | $14.65 | $14.25 | 2.8% | |
Washington H Soul Pattinson | $33.61 | -4.5% | $35.60 | $34.75 | 2.4% | |
Liontown Resources | $1.17 | -6.4% | $1.38 | $1.35 | 2.2% | |
Beach Energy | $1.84 | 4.6% | $1.90 | $1.86 | 2.2% |
'Target price' is an aggregate of Refinitiv broker target prices. % Dif compares target prices between Thursday, 28 March and Friday, 22 March
Copper prices rallied past US$4.0/lb earlier this month, sparking a widespread rally among local names like Sandfire Resources, Aeris Resources and 29Metals. Despite a higher consensus target price for Sandfire, Morgan Stanley suggests that its current valuation already factors in a copper price of US$4.60/lb. The analysts remain cautious on the company's valuation and express a preference for other names like Evolution Mining, which derives around 30% of its revenue from copper, alongside 29Metals.
Sandfire 12-month price chart (Source: Market Index)
