Broker Watch

These ASX stocks enjoyed the biggest upgrades and price target increases this week

Wed 19 Jun 24, 1:20pm (AEST)
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Key Points

  • Since our last update brokers appear to be seeking out bargains in beaten down blue chips
  • Commodity prices have pulled back, and so too have the stock prices of several mining companies, brokers are sniffing for bargains
  • The proposed merger between Integral Diagnostics (IDX) and Capitol Health (CAJ) was well received, resulting in several price target increases

Buying into weakness appears to be the theme from the last week in broker moves – and there’s quite a bit of weakness going around after the recent mini-reporting, guidance, and AGM season as several companies fell foul of market expectations.

The brokers sought bargains in beaten down blue chips like ASX (ASX: ASX), Corporate Travel Management (ASX: CTD), Orora (ASX: ORA), Seek (ASX: SEK), and The Lottery Corporation (ASX: TLC) – each receiving a bump in their ratings.

After a stellar start to 2024, commodity prices are dipping, and so too are many ASX mining and energy stocks. After the recent pullback, broker’s are looking more favourably on the likes of Sandfire Resources (ASX: SFR), Champion Iron (ASX: CIA), and Newmont Corporation (ASX: NEM). These three also figured highly in the price target increases list.

Also enjoying several sizeable price target increases was Integral Diagnostics (ASX: IDX) after brokers considered the details of its proposed merger with Capitol Health (ASX: CAJ). Clearly the tie-up was well received, with unanimously positive price target moves for IDX, while CAJ retained buys from Ord Minnett and United Capital Partners (not shown).

Heading the other way with respect to price targets, was (interestingly) our rating upgrade hero ASX, as well as perhaps the most interesting price target move over the last week, that of Evolution Energy Minerals (ASX: EV1).

EV1 had its price target cut to $0.24 from $0.40 by Shaw and Partners, but even at $0.24, it represents a massive 606% upside from the last price. Either Shaws is expecting EV1 to reverse its cascading downtrend, or perhaps they might have another price target cut waiting in the bag?

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 πŸ”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 13 June

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

ASX (ASX)

Morgan Stanley

Equal-Weight

Underweight

$54.65

-6.4%

Champion Iron (CIA)

CLSA

Buy

Outperform

$7.90

23.1%

Corporate Travel Management (CTD)

Jefferies

Buy

Hold

$16.00

20.2%

Integral Diagnostics (IDX)

JP Morgan

Overweight

Neutral

$2.80

12.0%

Jumbo Interactive (JIN)

Macquarie

Outperform

Neutral

$17.45

4.1%

Newmont Corporation (NEM)

UBS

Buy

Neutral

$75.00

20.2%

Orora (ORA)

Jarden

Buy

Overweight

$2.55

30.4%

Seek (SEK)

JP Morgan

Overweight

Neutral

$26.50

15.6%

Sandfire Resources (SFR)

Citi

Neutral

Sell

$8.90

4.8%

The Lottery Corporation (TLC)

Macquarie

Outperform

Neutral

$5.50

5.8%

Telix Pharmaceuticals (TLX)

Bell Potter

Buy

Hold

$19.00

10.5%

Biggest broker rating upgrades since Wednesday 13 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 18 June.

From the brokers:

Morgan Stanley upgrades ASX to EQUAL-WEIGHT from UNDERWEIGHT

  • “We think downside on costs has played out. Risks are now more balanced: regulatory concerns remain, but operating leverage is strong and ASX may benefit from capital markets recovery.”

  • “While we still see no EPS growth into FY26E, our EPS is up 2-3% and our new PT has just 3% downside.”

  • The price target was increased to $54.65 from $53.50

UBS upgrades Newmont Corporation to BUY from NEUTRAL

  • “We incorporate updated gold price forecasts and refresh operational assumptions resulting in material changes to earnings.”

  • “We remain constructive on the gold price and believe this will drive consensus earnings upgrades.”

  • “NEM has materially underperformed the gold price & gold peers.”

  • The price target was increased to $75 from $60

Macquarie upgrades Jumbo Interactive (ASX: JIN) to OUTPERFORM from NEUTRAL

  • “Jumbo's share-price has underperformed the ASX300 by 10% since the 1H FY24 result. This weakness is an opportunity to buy ahead of consensus upgrades given recent Australian lotteries jackpot activity. And with attractive growth and undemanding valuation, we upgrade to Outperform.”

  • The price target was increased to $17.45 from $17.15.


Broker downgrades since Tuesday 13 June

Company

Broker

New Rating

Old Rating

Price Target

PT Upside%

Bapcor (BAP)

Morgans

Hold

Add

$4.95

-0.6%

Bluescope Steel (BSL)

Jefferies

Underperform

Hold

$17.80

-12.5%

Bigtincan Holdings (BTH)

Morgan Stanley

Equal-Weight

Over

$0.10

1.0%

Chalice Mining (CHN)

UBS

Neutral

Buy

$1.50

10.7%

Lovisa Holdings (LOV)

Jefferies

Hold

Buy

$35.00

8.9%

Biggest broker rating downgrades since Wednesday 13 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Wednesday 18 June.

From the brokers:

UBS downgrades Chalice Mining (ASX: CHN) to NEUTRAL from BUY

  • “We update key assumptions for CHN's Gonneville project after the recent resource and metallurgical updates.”

  • “The lower project NPV is offset by a less dilutive raise assumption but, given changes in share price, we downgrade to Neutral.”

  • The price target is increased to $1.50 from $1.45


Biggest broker price target changes since Tuesday 13 June

Company

Broker

Rating

New PT

Old PT

PT Change%

PT Upside%

Newmont Corporation (NEM)

UBS

Buy

$75.00

$60.00

25.0%

20.2%

Goodman Group (GMG)

Citi

 

Buy

$40.00

$32.50

23.1%

-8.9%

29METALS (29M)

Citi

Neutral

$0.55

$0.45

22.2%

25.0%

Integral Diagnostics (IDX)

RBC Capital Markets

Sector Perform

$2.30

$1.95

17.9%

-8.0%

Integral Diagnostics (IDX)

JP Morgan

Overweight

$2.80

$2.40

16.7%

12.0%

Black Cat Syndicate (BC8)

Shaw and Partners

Buy

$0.86

$0.74

16.2%

230.8%

Sandfire Resources (SFR)

Citi

Neutral

$8.90

$7.90

12.7%

4.8%

Champion Iron (CIA)

CLSA

Buy

$7.90

$7.20

9.7%

23.1%

South32 (S32)

Citi

Neutral

$4.00

$3.65

9.6%

9.9%

Integral Diagnostics (IDX)

Macquarie

Outperform

$2.65

$2.45

8.2%

6.0%

Qantas Airways (QAN)

RBC Capital Markets

Sector Perform

$6.75

$6.25

8.0%

10.8%

Bega Cheese (BGA)

Bell Potter

Buy

$5.35

$5.00

7.0%

22.4%

South32 (S32)

UBS

Buy

$4.15

$3.90

6.4%

14.0%

Qantas Airways (QAN)

CLSA

Outperform

$6.90

$6.50

6.2%

13.3%

AGL Energy (AGL)

Morgan Stanley

Equal-Weight

$10.00

$9.50

5.3%

-4.0%

Origin Energy (ORG)

Morgan Stanley

Equal-Weight

$10.00

$9.50

5.3%

-3.9%

Viva Energy Group (VEA)

Macquarie

Outperform

$4.40

$4.70

-6.4%

36.2%

Evolution Mining (EVN)

Morgan Stanley

Overweight

$3.90

$4.20

-7.1%

8.9%

Ampol (ALD)

Macquarie

Outperform

$37.00

$40.35

-8.3%

11.4%

Corporate Travel Management (CTD)

Jefferies

Buy

$16.00

$17.50

-8.6%

20.2%

Lovisa Holdings (LOV)

Jefferies

Hold

$35.00

$39.00

-10.3%

8.9%

ASX (ASX)

JP Morgan

Neutral

$59.00

$66.50

-11.3%

1.0%

ASX (ASX)

Jefferies

Hold

$55.00

$65.00

-15.4%

-5.8%

Bluescope Steel (BSL)

Jefferies

Underperform

$17.80

$21.63

-17.7%

-12.5%

Evolution Energy Minerals (EV1)

Shaw and Partners

Buy

$0.24

$0.40

-40.0%

605.9%

Australian Vintage (AVG)

Bell Potter

Hold

$0.21

$0.41

-48.8%

16.7%

Bigtincan Holdings (BTH)

Morgan Stanley

Equal-Weight

$0.10

$0.35

-71.4%

1.0%

Biggest broker price target changes since Wednesday 13 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices as on Wednesday 18 June.

From the brokers:

Citi increases price target on 29Metals (ASX: 29M) to $0.55 from $0.45 (+22%)

  • “Citi’s global commodity team continues to highlight copper as their top pick...They expect stronger global growth expectations and rate cuts to provide support for the next leg higher.”

  • “Against this backdrop we revisit the estimates on our copper exposed names: SFR, 29M, EVN, BHP, RIO and S32.”

  • Rating is retained at NEUTRAL

Shaw and Partners increases price target on Black Cat Syndicate (ASX: BC8) to $0.86 from $0.74 (+16%)

  • “Black Cat are rapidly progressing to join the ranks of gold producers in WA. We maintain our Buy recommendation and increase our share price target to $0.86 per share on the back of a less dilutionary financing pathway.”

  • 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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