These ASX 200 stocks received the biggest broker downgrades last week
Here's why AMP and Chalice Mining flag the biggest week-on-week drop in consensus target prices.
Source: iStock
Mentioned
KEY POINTS
- AMP downgraded its outlook for net interest margin for a second time since October 2023
- Palladium prices plummeted to a five-year low but have since recovered partially
- Chalice's Gonneville Scoping Study assumed palladium prices of US$2,000 an ounce
AMP (ASX: AMP) downgraded its outlook for all-important net interest margin for a second time since 18 October 2023. Analysts were not happy with the news and consensus target prices were cut by 17% to $0.95 – Making AMP the most heavily downgraded stock last week.
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 |
|---|---|---|---|---|---|---|
AMP Limited | $0.86 | -14.9% | $0.95 | $1.15 | -17.4% | |
Chalice Mining | $1.57 | -4.3% | $3.08 | $3.36 | -8.3% | |
Sandfire Resources | $6.09 | 0.7% | $6.76 | $7.08 | -4.5% | |
Flight Centre | $19.12 | -2.0% | $22.73 | $23.78 | -4.4% | |
Nine Entertainment | $1.96 | 2.1% | $2.23 | $2.31 | -3.5% | |
Karoon Energy | $2.05 | -12.3% | $2.79 | $2.89 | -3.5% | |
Allkem | $8.69 | -3.4% | $14.14 | $14.62 | -3.3% | |
TPG Telecom | $4.75 | -12.8% | $5.66 | $5.85 | -3.2% | |
Alumina | $0.71 | -2.1% | $1.04 | $1.07 | -2.8% | |
Woodside Energy | $31.40 | -2.0% | $35.00 | $35.94 | -2.6% |
'Target price' is an aggregate of Refinitiv broker target prices. % Dif compares target prices between 17 and 10 November 2023.
A Closer Look at AMP
AMP has further reduced its FY23 net interest margin guidance to ~125 bps, following a recent downgrade of ~20 bps. Citi analysts had previously warned of margin pressures extending into future years, but these downgrades are happening sooner than expected.
AMP now expects modest volume growth in FY24 but has not provided a full explanation for the NIM decline or specific guidance for FY24, leaving the market concerned.
Citi analysts cut AMP's earnings per share outlook by 4% in FY23, 16% in FY24 and 12% in FY25 to reflect ongoing NIM deterioration. The note retained a Neutral rating with a $0.90 target price (from $1.15).
Chalice's Palladium Price Assumptions
Palladium prices plummeted to a five-year low of US$951 an ounce earlier this month before recovering partially to US$1,060. However, the metal remains down 40% year-to-date and 45% over the past twelve months.
This is a big deal for Chalice as the company's Gonneville Scoping Study (released 29 August 2023) assumed palladium prices of US$2,000 an ounce.
The project will produce several battery metals including nickel, copper, cobalt and palladium – Of which palladium is expected to make up approximately 55% of total revenues.
Prices effectively need to double between now and 2029 (which is when the project is expected to enter production).
