Broker Watch

The ASX stocks most upgraded by brokers with the greatest upside potential

Tue 07 May 24, 1:13pm (AEST)
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Key Points

  • Broker activity has picked as mining companies release their quarterly results
  • Coles Group (COL) and TPG Telecom (TPG) each attracted upgrades, while miner IGO (IGO) was most prominent in the downgrades list
  • Niobium tearaway WA Resources (WA1) took top honours for price target increase with a whopping 128% upgrade

Welcome to our weekly review of the biggest broker moves on ASX stocks for the last week. Broker activity has certainly picked up due to the release of quarterly activities and financial results for mining companies, and ahead of the mini-banking reporting season.

Generally, there were a greater number of upgrades compared to downgrades, which suggests most company reports were ahead of expectations. Supermarket giant Coles Group (ASX: COL) and telco TPG Telecom (ASX: TPG) featured in the upgrades list, while nickel and lithium miner IGO (ASX: IGO) was most prominent in the downgrades list.

As for price target changes, niobium tearaway WA Resources (ASX: WA1) took top honours with a whopping 128% upgrade to its price target from Argonaut Securities.


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: 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 Monday 29 April

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

Amcor (AMC)

Macquarie

Outperform

Neutral

$15.40

2.0%

Car Group (CAR)

Barrenjoey

Overweight

Neutral

$39.00

12.1%

Collins Foods (CKF)

Jarden

Overweight

Neutral

$10.25

10.3%

Coles Group (COL)

CLSA

Outperform

Underperform

$17.60

9.1%

Coles Group (COL)

UBS

Buy

Neutral

$18.25

13.1%

Computershare (CPU)

Morgan Stanley

Overweight

Equal-Weight

$29.70

11.8%

Core Lithium (CXO)

Macquarie

Neutral

Underweight

$0.15

7.1%

Droneshield (DRO)

Bell Potter

Buy

Hold

$1.00

13.0%

Helloworld Travel (HLO)

Ord Minnett

Buy

Accumulate

$3.10

28.6%

Light & Wonder (LNW)

Jarden

Buy

Overweight

$164.00

14.1%

Mirvac Group (MGR)

CLSA

Underperform

Sell

$2.02

-2.7%

Mineral Resources (MIN)

Morgan Stanley

Overweight

Equal-Weight

$83.00

7.3%

Monash IVF Group (MVF)

Wilsons

Overweight

Marketweight

$1.58

6.0%

Opthea (OPT)

E&P

Neutral

Negative

$0.70

5.3%

Qube Holdings (QUB)

Jarden

Buy

Overweight

$3.70

4.4%

TPG Telecom (TPG)

CLSA

Outperform

Underperform

$5.00

12.7%

TPG Telecom (TPG)

JP Morgan

Overweight

Neutral

$5.10

15.0%

Vicinity Centres (VCX)

Barrenjoey

Overweight

Negative

$2.20

14.0%

Woodside Energy Group (WDS)

Barrenjoey

Neutral

Underweight

$28.50

58.2%

WA1 Resources (WA1)

Argonaut Securities

Buy

Hold

$22.88

27.0%

Broker upgrades since Monday 29 April

From the brokers:

Macquarie upgrades Amcor (ASX: AMC) to OUTPERFORM from NEUTRAL

  • Broker noted that the company's third quarter earnings per share (EPS) was 6.6% above expectations on “improving volume trends along with strong cost saving benefits”.

Bell Potter upgrades DroneShield (ASX: DRO) to BUY from HOLD

  • Follows the company’s successful completion of a $100 million placement to help fund the development of its Handheld defeat and On-The-Move systems

  • Improved confidence in the company’s sales pipeline sees broker upgrade 2024 revenue forecasts by 16%, 2025 by 20%, and 2026 by 29%

  • “DroneShield is now well placed to capitalise on the growing demand for C-UAS solutions in response to current global tensions and the evolution of modern warfare”

  • Price target is $1

Morgan Stanley upgrades Mineral Resources (ASX: MIN) to OVERWEIGHT from EQUAL-WEIGHT

  • Broker sees the imminent ramp up of the company’s Ashburton project as a “key driver for a profitable iron ore business alongside long life, bankable mining services volumes”

  • The proposed partial sale of the company’s toll road “provides the required balance sheet flexibility to see the ramp-up through”

  • Price target is raised to $83 from $67

Broker downgrades since Monday 29 April

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

Aeris Resources (AIS)

Macquarie

Underweight

Neutral

$0.20

-21.6%

Ampol (ALD)

Barrenjoey

Neutral

Overweight

$37.76

6.5%

Chalice Mining (CHN)

Barrenjoey

Underweight

Neutral

$0.80

-32.4%

IGO (IGO)

CLSA

Outperform

Buy

$8.75

11.3%

IGO (IGO)

E&P

Neutral

Positive

$9.00

14.4%

IGO (IGO)

JP Morgan

Underweight

Neutral

$6.30

-19.9%

Imdex (IMD)

Citi

Neutral

Buy

$2.20

6.8%

Matrix Composites & Engineering (MCE)

Bell Potter

Hold

Buy

$0.42

20.0%

National Australia Bank (NAB)

Jefferies

Underweight

Hold

$27.00

-20.1%

Nickel Industries (NIC)

Citi

Neutral

Buy

$1.10

11.1%

The Star Entertainment Group (SGR)

Macquarie

Outperform

Neutral

$0.50

14.9%

Telix Pharmaceuticals (TLX)

Bell Potter

Hold

Buy

$14.50

-3.1%

Broker downgrades since Monday 29 April

From the brokers:

Macquarie downgrades Aeris Resources (ASX: AIS) to UNDERWEIGHT from NEUTRAL

  • Broker noted “mixed” performance in third quarter results, with copper production 7% below expectations

  • Costs and gold production were positives, however, as was the company’s maintenance of cost and production guidance

  • The price target is increased 33% to $0.20 on “near-term EPS shift” and Mt Colin mine life extension, but broker believes recent price strength leaves the stock overvalued

Citi downgrades Nickel Industries (ASX: NIC) to Neutral from BUY

  • The broker notes a largely “in-line” third quarter update

  • Lifts price target substantially from $0.80 to $1.10, but based upon recent price appreciation in company’s shares, there is little upside value left

Biggest broker price target changes since Monday 29 April

Company

Broker

Rating

New PT

Old PT

PT Change%

PT Upside%

WA1 Resources (WA1)

Argonaut Securities

Buy

$22.88

$10.23

123.7%

27.0%

Johns Lyng Group (JLG)

Bell Potter

Hold

$6.20

$3.60

72.2%

7.0%

Nickel Industries (NIC)

Citi

Neutral

$1.10

$0.80

37.5%

11.1%

Aeris Resources (AIS)

Macquarie

Underweight

$0.20

$0.15

33.3%

-21.6%

Aeris Resources (AIS)

Bell Potter

Buy

$0.30

$0.23

30.4%

17.6%

Alkane Resources (ALK)

Bell Potter

Buy

$1.25

$1.00

25.0%

113.7%

Mineral Resources (MIN)

Morgan Stanley

Overweight

$83.00

$67.00

23.9%

7.3%

Immutep (IMM)

Bell Potter

Buy

$0.80

$0.65

23.1%

70.2%

Computershare (CPU)

Morgan Stanley

Overweight

$29.70

$24.50

21.2%

11.8%

Premier Investments (PMV)

Macquarie

Neutral

$31.20

$26.00

20.0%

6.3%

Paladin Energy (PDN)

Citi

Buy

$17.00

$14.50

17.2%

2.5%

Jupiter Mines (JMS)

Macquarie

Outperform

$0.35

$0.30

16.7%

19.9%

Sandfire Resources (SFR)

Macquarie

Outperform

$10.50

$9.00

16.7%

7.5%

Evolution Mining (EVN)

Citi

Buy

$4.50

$3.90

15.4%

19.5%

Mineral Resources (MIN)

Bell Potter

Buy

$85.00

$75.00

13.3%

9.9%

Resmed Inc (RMD)

JP Morgan

Overweight

$34.50

$31.00

11.3%

6.1%

Sandfire Resources (SFR)

Morgan Stanley

Equal-Weight

$8.40

$7.65

9.8%

-14.0%

Reliance Worldwide Corp (RWC)

Ord Minnett

Accumulate

$5.60

$5.10

9.8%

11.6%

Monash IVF Group (MVF)

Wilsons

Overweight

$1.58

$1.45

9.0%

59.6%

Sandfire Resources (SFR)

Ord Minnett

Accumulate

$10.00

$9.20

8.7%

2.4%

Car Group (CAR)

Barrenjoey

Overweight

$39.00

$36.00

8.3%

12.1%

Resmed Inc (RMD)

UBS

Neutral

US$195

US$180

8.3%

n/a

Sandfire Resources (SFR)

Citi

Sell

$7.90

$7.30

8.2%

-19.1%

Wesfarmers (WES)

UBS

Neutral

$66.00

$61.00

8.2%

-5.4%

Macquarie Group (MQG)

UBS

Neutral

$200.00

$185.00

8.1%

6.1%

Regis Resources (RRL)

Bell Potter

Buy

$2.80

$2.60

7.7%

33.0%

Bubs Australia (BUB)

Bell Potter

Hold

$0.15

$0.14

7.1%

0.0%

National Australia Bank (NAB)

UBS

Sell

$30.00

$28.00

7.1%

-11.3%

Reliance Worldwide Corp (RWC)

Goldman Sachs

Buy

$5.35

$5.00

7.0%

6.6%

Resmed Inc (RMD)

RBC Capital Markets

Sector Perform

US$200

US$187

7.0%

n/a

Wesfarmers (WES)

CLSA

Underperform

$64.30

$60.40

6.5%

-7.8%

Resmed Inc (RMD)

Morgan Stanley

Overweight

$33.70

$31.80

6.0%

3.6%

Resmed Inc (RMD)

Citi

Buy

$36.00

$34.00

5.9%

10.7%

Coventry Group (CYG)

Bell Potter

Buy

$1.90

$1.80

5.6%

31.0%

Wesfarmers (WES)

Macquarie

Neutral

$64.60

$61.20

5.6%

-7.4%

Block (SQ2)

UBS

Buy

$100.00

$95.00

5.3%

-9.7%

Sandfire Resources (SFR)

Canaccord Genuity

Buy

$10.25

$9.75

5.1%

4.9%

Macquarie Group (MQG)

JP Morgan

Overweight

$205.00

$195.00

5.1%

8.7%

Biggest broker price target changes since Monday 29 April

From the brokers:

Citi raises Paladin Energy (ASX: PDN) price target to $17.00 from $14.50

  • The broker has upgraded its resource valuations for the company due to higher enterprise value (EV)/Resource comparisons as sentiment towards uranium improves

  • Broker also notes recent passing of bill to ban Russian uranium imports by US Senate, will assist in pushing uranium market towards the brokers “bull case scenario” that forecasts an average uranium price of US$151/lb in 2025 (versus spot around US$90/lb)

  • BUY rating retained

Citi raises Evolution Mining (ASX: EVN) price target to $4.50 from $3.90

  • Evolution Mining is the broker’s preferred ASX gold sector exposure after quarterly results

  • Long term gold price forecast lift from US$1,600/oz to US$1,850/oz “materially lifts earnings”

  • BUY rating retained

 

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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