The ASX 200 stocks hit with the biggest broker downgrades last week: Healius, Life360
Analysts have slashed their target prices for Healius by more than 50% in the past two weeks.
Source: iStock
Mentioned
KEY POINTS
- The consensus target price for Healius was $2.70 two weeks ago, now cut down to $1.76 after its $154 million capital raise
- Life360's share price is volatile, despite strong subscription growth and international expansion plans
- Brokers have downgraded their Life360 target prices by 4.1%, but the stock still has an outsized upside of 45%
Analysts have slashed their target prices for Healius (ASX: HLS) by more than 50% from $2.70 to $1.76 in the past two weeks.
Shares in the largest pathology and radiology partners in the country dropped to levels not seen since February 1999 after raising $154 million on November 22 at $1.20 per new share or a 34.6% discount to pre-raise prices.
The proceeds will be used to "deliver a reset of the balance sheet" and reduce its drawn debt by at least $150 million by mid next year.
Healius shares have bounced around 25% since its November 22 low but analysts remain cautious about any potential near-term recovery in pathology volumes.
The Biggest Broker Downgrades
The below data ranks ASX 200 companies based on the largest week-on-week decrease in consensus share price targets.
Ticker | Company Name | Close Price | 1-Week | Target Price | Prev Target Price | % Dif |
|---|---|---|---|---|---|---|
Healius | $1.52 | 14.3% | $1.76 | $2.15 | -18.1% | |
Life360 Inc | $7.78 | 3.3% | $11.10 | $11.58 | -4.1% | |
Link Administration | $1.44 | 20.6% | $1.54 | $1.60 | -3.8% | |
Allkem | $8.64 | 3.5% | $13.34 | $13.76 | -3.1% | |
De Grey Mining | $1.41 | 8.5% | $1.72 | $1.77 | -2.8% | |
Charter Hall Social Infrastructure | $2.67 | 6.0% | $3.12 | $3.21 | -2.8% | |
Core Lithium Ltd Ordinary | $0.26 | -22.7% | $0.40 | $0.41 | -2.4% | |
IGO | $8.03 | -5.0% | $11.69 | $11.95 | -2.2% | |
Kelsian Group Limited Ordinary | $6.63 | 3.0% | $7.47 | $7.63 | -2.1% | |
Region Group | $2.10 | 6.6% | $2.42 | $2.47 | -2.0% |
'Target price' is an aggregate of Refinitiv broker target prices. % Dif compares target prices between 24 November and 4 December 2023.
Life360's Earnings Call
Life360 (ASX: 360) has taken investors on a wild past 2-3 weeks. Here's a summary of recent events:
November 15 (+5.8%): Q3 2023 results reported 37% revenue growth to $78.6 million and adjusted EBITDA of $5.5m compared to a $9.4 million loss a year ago. Life360 reaffirmed its 2023 guidance including $300-310 million revenue and core subscription revenue growth of at least 50%
November 16 (-7.0%): Earnings call noted expectations that Q4 will be slower than Q3 due to seasonality and potential pull forward effects seen in Q3. Also flagged increased marketing and R&D investments in Q4 to drive growth.
December 5: Co-founder and CEO Chris Hulls sold a small percentage of his shares, equivalent to $4 million to cover tax obligations. He noted plans to slowly diversify his holdings over the next five years as well as transferring additional shares into trusts for family members.
Despite strong subscription growth and international expansion opportunities, most brokers have downgraded their Life360 target prices by 4.1% to $11.10 – Based on Tuesday's open of $7.58, this represents an outsized upside of 45%.
