Tough week on markets? These ASX stocks still got upgrades and price target increases from the big brokers
The ASX stocks that enjoyed the biggest upgrades and price target increases this week (plus those shunned with downgrades and cuts!)
Source: Shutterstock, Market Index
Mentioned
KEY POINTS
- Brokers have had a busy time since our last update reviewing several high-profile profit results and FY24 guidance updates
- You might not believe it, but heavily beaten down stocks Appen (APX) and Fortescue (FMG) both received multiple rating upgrades
- Strong performers tended to receive big price target increases, like JB Hi-Fi (JBH) and Technology One (TNE), while weak performers tended to receive big price target cuts, like Ramsay Health Care (RHC) and IGO (IGO)
Welcome back to our weekly check up on the biggest moves from the biggest brokers covering ASX stocks.
Possibly the most spurned and unloved artificial intelligence stock on the planet, Appen (ASX: APX), went a long way to redeeming itself last week. It’s Q2 FY24 Quarterly Activity Report showed strong revenue growth (even apart from its major customer Google), with strong gains from its Chinese customers. APX management said the company was finally back on track to get to cash EBITDA positive as soon as “early H2 2024”.
Broker Canaccord Genuity responded positively to APX’s update, upgraded the stock from HOLD to BUY and increasing their APX price target from $0.60 to $0.80. It appears to be a prudent adjustment given the stock is currently trading around $0.85 up from just $0.43 before the announcement – i.e., roughly double!
Also feeling the love from the big brokers was boutique fund manager Pinnacle Investment Management Group (ASX: PNI). It delivered FY24 results that pleased the market, showing 18% growth in net profit and 29% increase in its final dividend.
While there were no upgrades from the brokers for PNI, there were several nice price target increases. The biggest increases came from Macquarie (from $14.52 to $18.18) and Ord Minnett (from $16 to $20). Macquarie’s target allows for a 13.1% upside from yesterday’s closing price, and Ords allows for a very tidy plus 24%.
PNI’s share price has been on a tear lately, likely in anticipation of the bumper result. Another stock that has also done very well in terms of share price appreciation but is yet to report its results is JB HI-FI (ASX: JBH). It looks like Jefferies and JP Morgan are baulking at the stock's recent run-up, each downgrading their rating due to a lack of perceived value. Jefferies went to UNDERWEIGHT from HOLD, and JPM’s went to NEUTRAL from OVERWEIGHT. Both brokers played catch up with their targets, though, up by 5.7% (to $55.50) and up 4.5% (to $70) respectively.
Another stock that’s performed strongly in terms of share price and that also received solid price target increases is Technology One (ASX: TNE). The IT company saw its target increase from $18.30 to $22.20 at Macquarie (9.2% upside), and from $20 to $24 at RBC Capital Markets (18.1% upside).
This next one might surprise you. Or, if you believe the recent dip in Fortescue's (ASX: FMG) share price makes it a bargain, it might not. Either way, two upgrades for the beaten-down iron ore miner and green energy aspirant this week – from Morgans (to ADD from HOLD) and JP Morgan (to OVERWEIGHT from NEUTRAL). JPM cut its price target to $23 from $25 though, while Morgans retained its $23 marker. Given that FMG is currently trading around $18.50, both $23 targets imply around 24% upside.
Other stocks that received more mixed responses from the brokers included:
Gold Road Resources (ASX: GOR) – Upgrades by JP Morgan (to OVERWEIGHT from NEUTRAL) and Moelis Australia (to BUY from HOLD), but several price target decreases ranging from a few percent to -8.5% from UBS. These moves followed the release of the company’s June 2024 Quarterly Results.
Ramsay Health Care (ASX: RHC) – Downgraded to HOLD from ACCUMULATE by Ord Minnett, but several price target cuts of around 5%. These moves followed the release of the company’s FY24 Earnings Update.
IGO (ASX: IGO) - A whopping nine separate price target decreases ranging from a few percent to -11.8% from Citi. These moves followed the release of the company’s June 2024 Quarterly Activities Report.
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 🔎
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 Wednesday 31 July
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
Aeris Resources (AIS) | Macquarie | Outperform | Neutral | $0.26 | 52.9% |
Appen (APX) | Canaccord Genuity | Buy | Hold | $0.80 | 2.6% |
Capricorn Metals (CMM) | Jarden | Buy | Overweight | $6.28 | 14.0% |
Cleanaway Waste Management (CWY) | UBS | Buy | Neutral | $3.30 | 20.4% |
Fortescue (FMG) | JP Morgan | Overweight | Neutral | $23.00 | 23.7% |
Fortescue (FMG) | Morgans | Add | Hold | $23.00 | 23.7% |
Gold Road Resources (GOR) | JP Morgan | Overweight | Neutral | $1.85 | 10.8% |
Gold Road Resources (GOR) | Moelis Australia | Buy | Hold | $2.10 | 25.7% |
Harvey Norman Holdings (HVN) | JP Morgan | Overweight | Neutral | $5.60 | 22.8% |
OOH!Media (OML) | Jefferies | Buy | Hold | $1.75 | 19.9% |
Pointsbet Holdings (PBH) | Jarden | Buy | Overweight | $0.85 | 71.7% |
Pexa Group (PXA) | Goldman Sachs | Buy | Neutral | $16.00 | 24.0% |
Supply Network (SNL) | Ord Minnett | Buy | Accumulate | $26.60 | 10.2% |
Technology One (TNE) | RBC Capital Markets | Outperform | Sector Perform | $24.00 | 18.1% |
Biggest broker rating upgrades since Wednesday 31 July. Price Target Upside/Downside (“PT Upside %”) values in the last column are based on closing prices on Tuesday 6 August.
From the brokers:
Macquarie upgrades Aeris Resources (ASX: AIS) to OUTPERFORM from NEUTRAL
“FY25 guidance was stronger than we expected on both production and operating costs. Recent share-price weakness combined with strong guidance leads us to upgrade to Outperform.”
The price target was retained at $0.26.
Jarden upgrades Capricorn Metals (ASX: CMM) to BUY from OVERWEIGHT
“Mining companies face operational risks and current labour efficiency, permitting delays and inflation pressures are far from over. However, a record of execution and cost management should ensure CMM outperforms [its] peers medium-to-long term. Gold price influences valuation/rating, with upside risk due to expedited development timelines.”
“Upgrade rating to Buy (from Overweight) driven by increasingly clearer and low-risk pathways to material production and earnings growth set against a favourable gold price backdrop.”
The price target was increased to $6.28 from $5.80
Goldman Sachs upgrades Pexa Group (ASX: PXA) to BUY from NEUTRAL
“Upgrade PXA to Buy (from Neutral), with our revised A$16.00 TP implying +16% upside. Our positive view is a result of: (1) improved outlook in core business; (2) UK milestones being progressively achieved; and (3) valuation screening favorable.”
The price target was increased to $16 from $14.20
Jarden upgrades PointsBet Holdings (ASX: PBH) to BUY from OVERWEIGHT
“PBH continues to prove its ability to profitably take share in a softer Australian wagering market from its larger peers…positive momentum continues, outperforming Sportsbet's and Tabcorp's active user growth”
“PBH continues to grow its iGaming mix and manage Net Win margin. We assume run-rate profitability this time next year, with full-year profitability in FY26E.”
“We move to a Buy (from Overweight) on share price and TSR relative to our target price and stronger signs of profitability going forward.”
The price target was retained at $0.85
Broker downgrades since Wednesday 31 July
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
Autosports Group (ASG) | Citi | Neutral | Buy | $2.25 | 9.8% |
Bluescope Steel (BSL) | JP Morgan | Neutral | Overweight | $23.00 | 13.5% |
Credit Corp Group (CCP) | Macquarie | Neutral | Outperform | $18.01 | 19.6% |
Gold Road Resources (GOR) | Argonaut Securities | Hold | Buy | $1.85 | 10.8% |
JB HI-FI (JBH) | Jefferies | Underweight | Hold | $55.50 | -16.4% |
JB HI-FI (JBH) | JP Morgan | Neutral | Overweight | $70.00 | 5.5% |
Lifestyle Communities (LIC) | Jarden | Overweight | Buy | $11.70 | 34.3% |
Mirvac Group (MGR) | Citi | Neutral | Buy | $2.10 | 2.4% |
Monadelphous Group (MND) | E&P | Neutral | Positive | $13.24 | 13.5% |
News Corporation (NWS) | UBS | Buy | Neutral | $46.30 | 13.0% |
Orora (ORA) | Citi | Neutral | Buy | $2.30 | 19.8% |
Pro Medicus (PME) | Jefferies | Hold | Buy | $120.00 | -2.4% |
Perpetual (PPT) | Macquarie | Neutral | Outperform | $22.80 | 9.4% |
Ramsay Health Care (RHC) | Ord Minnett | Hold | Accumulate | $46.80 | 7.0% |
Siteminder (SDR) | Jarden | Overweight | Buy | $5.85 | 13.6% |
Suncorp Group (SUN) | Jefferies | Hold | Buy | $18.00 | 11.0% |
Seven West Media (SWM) | UBS | Sell | Neutral | $0.16 | -3.0% |
TPG Telecom (TPG) | Goldman Sachs | Sell | Neutral | $4.35 | -3.1% |
Biggest broker rating downgrades since Wednesday 31 July. Price Target Upside/Downside (“PT Upside %”) values in the last column are based on closing prices on Tuesday 6 August.
From the brokers:
Macquarie downgrades Perpetual (ASX: PPT) to NEUTRAL from OUTPERFORM
“Net flows of -$8.9 billion (MRE -$2.8 billion; 3Q24 -$5.2 billion) were disappointing. Market movements (-$1.4 billion) and FX (-$2.1 billion) were also headwinds.”
“PAM operational trends remain under pressure, and PCT/WM net proceeds present limited upside.”
The price target was lowered to $22.80 from $27.50
UBS downgrades Seven West Media (ASX: SWM) to SELL from NEUTRAL
“[Rating downgrade is] due to weaker metro FTA recovery in FY25e, removal of the dividend in FY25e (gearing likely elevated at 1.7x FY25e net debt to EBITDA), and downgrade to our long term EBITDA margins from 10% to 5% to reflect ongoing weakness in metro free-to-air ad markets.”
The price target was lowered to $0.16 from $0.26
Biggest broker price target changes since Wednesday 31 July
Company | Broker | Rating | New PT | Old PT | PT Change% | PT Upside% |
|---|---|---|---|---|---|---|
Clarity Pharmaceuticals (CU6) | Bell Potter | Buy | $10.00 | $4.00 | 150.0% | 72.4% |
Appen (APX) | Canaccord Genuity | Buy | $0.80 | $0.60 | 33.3% | 2.6% |
Pinnacle Investment Management (PNI) | Macquarie | Outperform | $18.18 | $14.52 | 25.2% | 13.1% |
Pinnacle Investment Management (PNI) | Ord Minnett | Buy | $20.00 | $16.00 | 25.0% | 24.4% |
AMP (AMP) | Morgan Stanley | Equal-Weight | $1.29 | $1.06 | 21.7% | 15.7% |
Technology One (TNE) | Macquarie | Outperform | $22.20 | $18.30 | 21.3% | 9.2% |
Technology One (TNE) | RBC Capital Markets | Outperform | $24.00 | $20.00 | 20.0% | 18.1% |
Supply Network (SNL) | Ord Minnett | Buy | $26.60 | $22.50 | 18.2% | 10.2% |
Cleanaway Waste Management (CWY) | UBS | Buy | $3.30 | $2.80 | 17.9% | 20.4% |
Pinnacle Investment Management (PNI) | UBS | Neutral | $17.00 | $14.50 | 17.2% | 5.7% |
Harvey Norman Holdings (HVN) | JP Morgan | Overweight | $5.60 | $4.90 | 14.3% | 22.8% |
Resmed Inc (RMD) | Citi | Neutral | $34.00 | $30.00 | 13.3% | 1.8% |
Pexa Group (PXA) | Goldman Sachs | Buy | $16.00 | $14.20 | 12.7% | 24.0% |
Pointsbet Holdings (PBH) | Ord Minnett | Buy | $0.90 | $0.80 | 12.5% | 81.8% |
Pinnacle Investment Management (PNI) | Morgans | Add | $18.00 | $16.00 | 12.5% | 11.9% |
REA Group (REA) | Goldman Sachs | Buy | $223.00 | $202.00 | 10.4% | 17.8% |
James Hardie Industries (JHX) | Ord Minnett | Hold | $55.00 | $50.00 | 10.0% | 6.9% |
News Corporation (NWS) | Goldman Sachs | Buy | $48.70 | $44.70 | 8.9% | 18.9% |
Pro Medicus (PME) | Goldman Sachs | Buy | $148.00 | $136.00 | 8.8% | 20.3% |
Insurance Australia Group (IAG) | Goldman Sachs | Neutral | $7.30 | $6.72 | 8.6% | 5.0% |
Lotus Resources (LOT) | Bell Potter | Buy | $0.65 | $0.60 | 8.3% | 182.6% |
Cooper Energy (COE) | Jarden | Overweight | $0.26 | $0.24 | 8.3% | 15.6% |
Capricorn Metals (CMM) | Jarden | Buy | $6.28 | $5.80 | 8.3% | 14.0% |
Gold Road Resources (GOR) | Moelis Australia | Buy | $2.10 | $1.95 | 7.7% | 25.7% |
Resmed Inc (RMD) | Ord Minnett | Accumulate | $35.40 | $33.00 | 7.3% | 6.0% |
ALS (ALQ) | Macquarie | Outperform | $16.15 | $15.20 | 6.3% | 8.7% |
JB HI-FI (JBH) | Jefferies | Underweight | $55.50 | $52.50 | 5.7% | -16.4% |
Resmed Inc (RMD) | Morgans | Add | $35.93 | $34.11 | 5.3% | 7.5% |
JB HI-FI (JBH) | JP Morgan | Neutral | $70.00 | $67.00 | 4.5% | 5.5% |
Champion Iron (CIA) | Goldman Sachs | Buy | $7.60 | $8.00 | -5.0% | 29.9% |
Ramsay Health Care (RHC) | Ord Minnett | Hold | $46.80 | $49.40 | -5.3% | 7.0% |
Domain Holdings Australia (DHG) | Goldman Sachs | Neutral | $3.40 | $3.60 | -5.6% | 14.9% |
IGO (IGO) | Goldman Sachs | Buy | $6.75 | $7.15 | -5.6% | 35.5% |
Megaport (MP1) | Goldman Sachs | Buy | $14.00 | $14.85 | -5.7% | 39.0% |
Ramsay Health Care (RHC) | Macquarie | Neutral | $50.10 | $53.35 | -6.1% | 14.5% |
Monadelphous Group (MND) | Macquarie | Outperform | $14.15 | $15.10 | -6.3% | 21.3% |
IGO (IGO) | UBS | Neutral | $5.70 | $6.10 | -6.6% | 14.5% |
Rio Tinto (RIO) | Citi | Neutral | $128.00 | $137.00 | -6.6% | 8.2% |
Aeris Resources (AIS) | Bell Potter | Buy | $0.28 | $0.30 | -6.7% | 64.7% |
IGO (IGO) | Macquarie | Neutral | $5.60 | $6.00 | -6.7% | 12.4% |
Frontier Digital Ventures (FDV) | Morgans | Add | $0.66 | $0.71 | -7.0% | 73.7% |
Nexgen Energy (Canada) (NXG) | Shaw and Partners | Buy | $16.20 | $17.50 | -7.4% | 83.7% |
Gold Road Resources (GOR) | Argonaut Securities | Hold | $1.85 | $2.00 | -7.5% | 10.8% |
Jupiter Mines (JMS) | Macquarie | Outperform | $0.37 | $0.40 | -7.5% | 60.9% |
IGO (IGO) | JP Morgan | Neutral | $5.90 | $6.40 | -7.8% | 18.5% |
Conrad Asia Energy Ltd. (CRD) | Bell Potter | Buy | $1.70 | $1.85 | -8.1% | 107.3% |
Nickel Industries (NIC) | Bell Potter | Buy | $1.41 | $1.54 | -8.4% | 81.9% |
Gold Road Resources (GOR) | UBS | Buy | $2.15 | $2.35 | -8.5% | 28.7% |
Avita Medical Inc. (AVH) | Bell Potter | Hold | $3.20 | $3.50 | -8.6% | 26.0% |
IGO (IGO) | Morgan Stanley | Underweight | $4.60 | $5.05 | -8.9% | -7.6% |
Alkane Resources (ALK) | Ord Minnett | Hold | $0.50 | $0.55 | -9.1% | 25.0% |
Nine Entertainment Co. Holdings (NEC) | UBS | Buy | $1.95 | $2.15 | -9.3% | 45.0% |
Nine Entertainment Co. Holdings (NEC) | Goldman Sachs | Buy | $1.90 | $2.10 | -9.5% | 41.3% |
OOH!Media (OML) | Goldman Sachs | Buy | $1.50 | $1.67 | -10.2% | 2.7% |
TPG Telecom (TPG) | Goldman Sachs | Sell | $4.35 | $4.90 | -11.2% | -3.1% |
IGO (IGO) | Citi | Neutral | $6.00 | $6.80 | -11.8% | 20.5% |
RMA Global (RMY) | Bell Potter | Buy | $0.10 | $0.12 | -16.7% | 63.9% |
Perpetual (PPT) | Macquarie | Neutral | $22.80 | $27.50 | -17.1% | 9.4% |
Orora (ORA) | Citi | Neutral | $2.30 | $2.86 | -19.6% | 19.8% |
Lifestyle Communities (LIC) | Jarden | Overweight | $11.70 | $15.00 | -22.0% | 34.3% |
ARN Media (A1N) | UBS | Neutral | $0.65 | $0.87 | -25.3% | -3.0% |
Autosports Group (ASG) | Citi | Neutral | $2.25 | $3.05 | -26.2% | 9.8% |
Southern Cross Media Group (SXL) | UBS | Neutral | $0.68 | $0.96 | -29.2% | 11.5% |
Seven West Media (SWM) | Goldman Sachs | Sell | $0.14 | $0.21 | -33.3% | -15.2% |
Syrah Resources (SYR) | Morgan Stanley | Equal-Weight | $0.25 | $0.40 | -37.5% | 4.2% |
Seven West Media (SWM) | UBS | Sell | $0.16 | $0.26 | -38.5% | -3.0% |
Biggest broker price target changes since Wednesday 31 July. Price Target Upside/Downside (“PT Upside %”) values in the last column are based on closing prices as on Tuesday 6 August.
From the brokers:
Bell Potter increases price target for Clarity Pharmaceuticals (ASX: CU6) to $10 from $4 (implies 72% upside)
“We acknowledge this is a step change, however, the major driver is the current market capitalisation $A1.985 billion (US$1.3 billion) relative to transaction values for what we believe are inferior assets.”
“The assets in clinical stage development by CU6 continue to show outstanding safety with good indications of efficacy supported by composition of matter patents.”
“The valuation is determined from a revised DCF model supported by recent M&A in the radio-pharmaceuticals space.”
Rating is retained at BUY
Goldman Sachs increases price target for Pro Medicus (ASX: PME) to $148 from $136 (implies 20.3% upside)
“In our view, PME is well positioned into FY25 given a full-year benefit of some large and high profile contracts, in addition to the accelerating frequency and size of new contract wins.”
“PME is benefiting from an industry network effect, and we forecast share gains to 13% in FY30E (around 7% today) as more hospitals move to modern systems.”
“PME is expanding into adjacent solutions including AI and Cardiology which could provide significant upside given we believe PME is the incumbent technology leader in radiology and is well-placed to take share in both markets”
Rating is retained at BUY
