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

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

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

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

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