The ASX stocks getting the biggest broker upgrades, downgrades, and price target changes
It was another busy week for brokers with IDP Education falling foul, while the entire ASX gold sector received a big boost from UBS.
Source: business man in love
Mentioned
KEY POINTS
- An important market Update from IELTS English language test provider IDP Education saw it receive several price target cuts
- Lovisa received four rating downgrades last week, but managed to snare a win this week with Macquarie upgrading it to Outperform
- UBS has gone all in on the ASX gold sector with several rating upgrades as well as sizeable price target increases
Welcome to our weekly review of the biggest broker moves on ASX stocks for the last week. Today’s snapshot represents all the major broker moves since our last catch-up on 5 June.
It was another busy week for the brokers as AGM season wound down and company investor days continued. FY24 guidance updates are slowing to a trickle (as June 30 looms), but there was an important “Regulatory and Market Update” from IELTS English language test provider IDP Education (ASX: IEL).
IEL warned that planned regulatory changes to student visas in several countries would likely reduce the number of visas granted, and therefore significantly negatively impact the company’s earnings. Brokers responded with several price target cuts, but fortunately for IEL, they generally retained their ratings.
Elsewhere, budget jewellery and fashion retailer Lovisa (ASX: LOV) (the subject of four ratings downgrades as per our last update) snagged a rating upgrade from Macquarie. You might remember that several brokers responded poorly to the company’s announcement last week that CEO Victor Herrero would be stepping down to be replaced by the current MD of Smiggle, John Chesterton.
In its latest research note on the company, Macquarie noted, “Our investment thesis is based on store rollout maintaining current cadence, with EBIT margin expansion due to lower employee costs”. The broker bumped up its rating on LOV to OUTPERFORM from the previous neutral, and a price target boost accompanied too – a massive 25% higher to $33.70.
Perhaps the most interesting broker research note in some time came from UBS, who doubled down on their already bullish position on ASX gold producers. In a report titled “Gold heading towards A$4,000/oz”, the broker moved the last of its neutral ratings in the sector to buy.
This meant rating upgrades for Genesis Minerals (ASX: GMD), Northern Star Resources (ASX: NST), Regis Resources (ASX: RRL), and SSR Mining (ASX: SSR). Each also received a tidy price target increase, as did: De Grey Mining (ASX: DEG), Gold Road Resources (ASX: GOR), and Bellevue Gold (ASX: BGL).
There are plenty of other interesting broker moves for the period – and you can only get this level of detail on what they’re up to from us – so let’s dive in!
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 Tuesday 5 June
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
Aussie Broadband (ABB) | Ord Minnett | Buy | Accumulate | $4.20 | 21.7% |
Brambles (BXB) | Morgan Stanley | Overweight | Equal-Weight | $16.60 | 13.8% |
Champion Iron (CIA) | Macquarie | Outperform | Neutral | $7.90 | 17.4% |
Genesis Minerals (GMD) | Ord Minnett | Accumulate | Hold | $1.90 | 5.8% |
Genesis Minerals (GMD) | UBS | Buy | Neutral | $2.30 | 28.1% |
Infomedia (IFM) | Bell Potter | Buy | Hold | $1.90 | 18.0% |
Lovisa Holdings (LOV) | Macquarie | Outperform | Neutral | $33.70 | 7.5% |
Mineral Resources (MIN) | Bank of America | Buy | Neutral | $82.00 | 27.8% |
Northern Star Resources (NST) | UBS | Buy | Neutral | $18.50 | 34.7% |
Northern Minerals (NTU) | Ord Minnett | Buy | Hold | $0.05 | 35.1% |
Region Group (RGN) | Morgan Stanley | Overweight | Equal-Weight | $2.50 | 15.7% |
Regis Resources (RRL) | UBS | Buy | Sell | $2.10 | 18.6% |
Siteminder (SDR) | Wilsons | Overweight | Marketweight | $6.50 | 35.7% |
SSR Mining (SSR) | UBS | Buy | Neutral | $10.20 | 36.5% |
Woodside Energy Group (WDS) | Macquarie | Outperform | Neutral | $32.00 | 15.1% |
Biggest broker rating upgrades since Wednesday 5 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 12 June.
From the brokers:
UBS upgrades Genesis Minerals (ASX: GMD) to BUY from HOLD
“GMD remains one of the cheapest on EV/resource and reserve metrics and as such offers strong leverage to higher prices.”
The price target was increased to $2.30 from $2.00
UBS upgrades Northern Star Resources (ASX: NST) to BUY from HOLD
“While we remain cautious on FY25 production expectations (UBSe 1.81moz at A$1,815/ oz and consensus 1.84moz at A$1,763/oz) and the usual execution risks around the KCGM mill expansion, NST should deliver to the low end of FY24. The KCGM expansion will likely drive unit costs lower, but we look to delivery of ~2mozpa in FY26E.”
The price target was increased to $18.50 from $15.00
Macquarie upgrades Lovisa (ASX: LOV) to OUTPERFORM from NEUTRAL
“We continue to expect strong store rollout across several markets, with ability to grow revenue per store. The succession of the current CEO will lead to significant cost savings and we expect EBIT margin expansion as a result.”
The price target was increased to $33.70 from $26.90.
Macquarie upgrades Champion Iron (ASX: CIA) to OUTPERFORM from NEUTRAL
“CIA is our iron ore preference against our somewhat bearish stance on iron ore, with its high-quality product able to attract a premium insulating it against bulk 62% price declines.”
The price target was increased to $7.90 from $7.50.
Broker downgrades since Tuesday 5 June
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
APM Human Services International (APM) | Bell Potter | Hold | Buy | $1.45 | 5.1% |
Beach Energy (BPT) | Citi | Neutral | Buy | $1.60 | 0.0% |
BWP Trust (BWP) | Moelis Australia | Sell | Hold | $3.61 | 0.0% |
Codan (CDA) | Macquarie | Neutral | Outperform | $11.15 | 4.4% |
Integral Diagnostics (IDX) | E&P | Neutral | Positive | $2.40 | 0.8% |
Imdex (IMD) | Macquarie | Neutral | Outperform | $2.42 | 7.6% |
Lendlease Group (LLC) | UBS | Sell | Neutral | $5.56 | 0.0% |
Mineral Resources (MIN) | CLSA | Underperform | Outperform | $75.00 | 16.9% |
Northern Star Resources (NST) | Ord Minnett | Hold | Accumulate | $14.30 | 4.2% |
Sandfire Resources (SFR) | Ord Minnett | Hold | Accumulate | $9.30 | 6.7% |
Whitehaven Coal (WHC) | CLSA | Outperform | Buy | $9.70 | 25.8% |
Biggest broker rating downgrades since Wednesday 5 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 12 June.
From the brokers:
Citi downgrades Beach Energy (ASX: BPT) to NEUTRAL from BUY
“We expect consensus has missed on production and capex forecasts and see downside risk to earnings and valuation.”
“We open a negative Catalyst Watch…and encourage investors to reassess the investment thesis.”
The price target is cut to $1.60 from $1.70
Biggest broker price target changes since Tuesday 5 June
Company | Broker | Rating | New PT | Old PT | PT Change% | PT Upside% |
|---|---|---|---|---|---|---|
SSR Mining Inc. (SSR) | UBS | Buy | $10.20 | $8.00 | 27.5% | 36.5% |
Lovisa Holdings (LOV) | Macquarie | Outperform | $33.70 | $26.90 | 25.3% | 7.5% |
Northern Star Resources (NST) | UBS | Buy | $18.50 | $15.00 | 23.3% | 34.7% |
Siteminder (SDR) | Wilsons | Overweight | $6.50 | $5.40 | 20.4% | 35.7% |
De Grey Mining (DEG) | UBS | Buy | $2.10 | $1.75 | 20.0% | 103.9% |
Gold Road Resources (GOR) | UBS | Buy | $2.55 | $2.15 | 18.6% | 62.4% |
Regal Partners (RPL) | Bell Potter | Buy | $4.75 | $4.02 | 18.2% | 31.2% |
Genesis Minerals (GMD) | UBS | Neutral | $2.30 | $2.00 | 15.0% | 28.1% |
Regis Resources (RRL) | UBS | Buy | $2.10 | $1.85 | 13.5% | 18.6% |
Bellevue Gold (BGL) | UBS | Buy | $2.30 | $2.05 | 12.2% | 21.1% |
Cooper Energy (COE) | Macquarie | Outperform | $0.30 | $0.27 | 11.1% | 46.3% |
Gentrack Group (GTK) | Shaw and Partners | Buy | $10.00 | $9.10 | 9.9% | 10.0% |
Evolution Mining (EVN) | UBS | Buy | $4.60 | $4.20 | 9.5% | 23.3% |
Bapcor (BAP) | CLSA | Outperform | $5.43 | $5.00 | 8.6% | 8.2% |
Cooper Energy (COE) | Canaccord Genuity | Buy | $0.27 | $0.25 | 8.0% | 31.7% |
Technology One (TNE) | Bell Potter | Buy | $20.25 | $19.00 | 6.6% | 12.7% |
Flight Centre Travel (FLT) | UBS | Neutral | $21.30 | $22.50 | -5.3% | 11.0% |
Beach Energy (BPT) | Citi | Neutral | $1.60 | $1.70 | -5.9% | 0.0% |
Lovisa Holdings (LOV) | Canaccord Genuity | Hold | $29.00 | $31.00 | -6.5% | -7.5% |
Sandfire Resources (SFR) | Ord Minnett | Hold | $9.30 | $10.00 | -7.0% | 6.7% |
Seek (SEK) | CLSA | Outperform | $26.00 | $28.00 | -7.1% | 13.9% |
Tyro Payments (TYR) | Ord Minnett | Buy | $1.70 | $1.85 | -8.1% | 116.6% |
Temple & Webster (TPW) | Citi | Buy | $11.00 | $12.00 | -8.3% | 15.4% |
Lendlease Group (LLC) | Citi | Neutral | $6.30 | $6.90 | -8.7% | 13.3% |
IDP Education (IEL) | UBS | Neutral | $16.10 | $17.65 | -8.8% | 5.9% |
IDP Education (IEL) | JP Morgan | Neutral | $16.00 | $17.60 | -9.1% | 5.3% |
Corporate Travel Management (CTD) | UBS | Buy | $19.80 | $21.80 | -9.2% | 50.9% |
Northern Star Resources (NST) | Ord Minnett | Hold | $14.30 | $16.20 | -11.7% | 4.2% |
IDP Education (IEL) | Goldman Sachs | Buy | $21.75 | $25.30 | -14.0% | 43.1% |
Lendlease Group (LLC) | UBS | Sell | $5.56 | $7.10 | -21.7% | 0.0% |
IDP Education (IEL) | Macquarie | Neutral | $16.00 | $22.00 | -27.3% | 5.3% |
Biggest broker price target changes since Wednesday 5 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices as on Wednesday 12 June.
From the brokers:
UBS increases price target on SSR Mining (ASX: SSR) to $10.20 from $8.00 (+27.5%)
“Uncertainty remains around the future at Çöpler post the US$250-300m reclamation and remediation and we hold no value in our SOTP for Turkey assets. However Marigold, Seabee and Puna (silver) offer significant leverage to the higher forecast prices.”
Rating is upgraded to BUY from NEUTRAL
Bell Potter increases price target on Technology One (ASX: TNE) to $20.25 from $19.00 (+6.6%)
“Technology One has had very consistent and an increasing rate of PBT growth the last four years: 13% in FY20, 14% in FY21, 15% and FY22 and 16% in FY23. This trend looks set to continue for the short to medium term”
Rating is maintained at BUY
Macquarie cuts price target on IDP Education (ASX: IEL) to $16.00 from $22.00 (-27.3%)
“Indeed, we think there is further downside risk to FY25 earnings expectations mainly around student placement volumes and the consequent operating deleverage.”
“We will look for a more stabilised regulatory environment before becoming more positive.”
Rating is maintained at NEUTRAL
Goldman Sachs cuts price target on IDP Education (ASX: IEL) to $21.75 from $25.30 (-14%)
“IEL’s trading update was soft, but should help investors better frame the earnings base for FY25 as the impacts of regulatory tightening measures become clearer.”
“The volume trough is deeper than anticipated…though we expect IEL to materially outperform the industry based on its higher-quality customer base and position as a trusted brand for both unis and students”
“Overall we now expect FY25 EBIT of A$222mn, -4% vs FY24E, and cut FY24/25/26E EBIT -9%/-17%/-17%”
Rating is maintained at BUY
