Broker Watch

The ASX stocks getting the biggest broker upgrades, downgrades, and price target changes

Thu 13 Jun 24, 1:58pm (AEST)
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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 ๐Ÿ”Ž

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

 

Written By

Carl Capolingua

Content Editor

Carl has over 30-years investing experience, helping 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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