Upgrades and Downgrades: Pro Medicus, Treasury Wine and tech stocks

Market Index provides regular updates for the latest broker ratings for ASX companies. 

Upgrades

ASX (ASX: ASX)

• Morgans upgrades to Hold from Reduce with $76.90 target price

• Broker notes the sharp -4% selloff on FY22 results even though the business posted top-line growth across all segments

Blackmores (ASX: BKL)

• Credit Suisse upgrades to Outperform from Neutral with $90 target price

• Blackmores shares tanked -10% on Thursday after posting its FY22 results. Credit Suisse said the results missed expectations as a result of supply chain challenges, Chinese lockdowns and industry wide inflationary pressures. Broker believes upside risks outweighs the downside, including price hikes, cost savings and cycling through tough pandemic comparables

Downgrades

Auckland International Airport (ASX: AIA)

• Citi downgrades to Sell from Neutral with $6.90 target price

• FY23 guidance was well-below the investment bank's forecasts and a steep -47% miss against consensus expectations

Amcor (ASX: AMC)

• Macquarie downgrades to Neutral from Outperform with $18.62 target price

• Valuation is trading at a circa 16% premium to global peers. While defensive characteristics remain attractive, share price is trading close to Macquarie targets

Appen (ASX: APX)

• Citi downgrades to Sell from Neutral with $4.40 target price (from $6.60)

• The investment bank forecasts Appen's Global Services segment revenue (contributed 75% to 1H22 revenue) to fall -10% in the second-half as large customers such as Facebook and Google experience a slowdown in ad spend

Pro Medicus (ASX: PME)

• Bell Potter downgrades to Hold from Buy with $55 target price

• FY22 earnings were in-line with market expectations. "Growth of cloud-based deployments for major healthcare IT projects is a long-term thematic that seems certain to drive new business wins," the broker notes. Downgrade based on recent movements in share price

Treasury Wine (ASX: TWE)

• Citi downgrades to Neutral from Buy with $13.50 target price

• The investment bank warned that inflationary pressures could take a toll on both consumer demand and margins. Earnings expected to skew towards premium and luxury products. Luxury inventory expected to bear lower yield and higher costs in FY23

Xero (ASX: XRO)

• Macquarie downgrades to Underperform from Neutral with $70 target price (from $80)

• The broker warns of further downside risks stemming from a slowdown in international markets. FY23-24 earnings were downgraded by -33% and -25% respectively