OUR QUEST IS NOT TO BE BULLISH OR BEARISH, BUT TO CORRECTLY ASSESS FUTURE TRENDS

Bell Potter rates JIN as Hold

Bell Potter notes near-term earnings (EBITDA) pressure for Jumbo Interactive as growth in ticket sales slows from elevated pandemic levels, though strong lottery participation and product enhancements are expected to support a rebound into FY26.

The broker highlights FY25 is likely to mark a low point in margin, with improved outcomes expected from the OzLotto game update and further growth in the charity lottery segment.

Jumbo’s international business, including the UK and Canada, is also gaining traction but remains a modest contributor near-term, note the analysts.

While valuation remains full, the broker sees long-term upside from increased digital penetration, higher jackpot frequency, and margin recovery as marketing costs stabilise. 

Bell Potter lowers its target price to $11.10 from $13.20 and retains a Hold rating.

Morgans rates RIO as Add

Rio Tinto reported a "softer" start to 2025, with the Pilbara operations impacted by weather events in the first quarter, which curbed iron ore output. Morgans remains concerned the company will need to rely on lower-grade products, underwriting potential earnings volatility.

Copper and aluminium performed well, with Oyu Tolgoi operating smoothly over the period, achieving record production in March.

The analyst continues to watch the trend of low-grade iron ore discounts.

No change to Add rating. Target price slips to $123 from $126.

Bell Potter rates SHV as Buy

Select Harvests has cut its FY25 almond crop forecast by around -10% to between 24,000-26,500t, marking a second downgrade and mitigating the benefit of stronger almond prices, notes Bell Potter.

The broker lifts FY25 almond price assumptions to $10.35/kg from $9.20/kg, supported by spot pricing above $11/kg and strong hedging by the company at an Australian dollar rate of 0.648.

Water cost inflation is expected from FY26, note the analysts, due to Southern Murray-Darling Basin storage levels falling to around 51%, leading to increased water pricing assumptions over FY26–27.

Buy. Target unchanged at $5.80 after the broker allows for a lower FY25 crop, rising almond prices across FY25-27, and elevated water costs in later years.