Weekly Reports | 10:20 AM
Broker Rating Changes (Post Thursday Last Week)
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APPEN LIMITED ((APX)) Upgrade to Speculative Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity raises its target for Appen to 80c from 60c and upgrades to Speculative Buy from Hold as revenues recovered strongly towards the end of the June quarter. Quartely revenue was US$55m compared to the broker's US$49m forecast.
Offering light at the end of the tunnel, according to the broker, revenues rose to US$21.1m from $US15.9m in June, all following the loss of Google which exited as a customer in March. Closing cash at June 30 was US$34.7m, a rise of US$2m over the first half.
While this June revenue number run-rates to circa US$130m for the 2H, the analysts conservatively forecast US$117m.
Canaccord highlights the cash cost base continues to fall, with opex around -US$60m lower on an annualised basis in Q2 than the 1Q of FY23.
DUSK GROUP LIMITED ((DSK)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Dusk Groups trading update showed improving sales performance through the second half, strong cash generation and, importantly for Canaccord Genuity, a move into positive same store sales through the last five trading weeks.
With the help of a new product activation, total sales are up 28% in the first two weeks of FY25. New management looks to have executed well in rejuvenating part of the product offer and being able to engage the consumer with promotional activity, the broker suggests.
Following a couple of years of material operating deleverage, Canaccord is intrigued by what may lay ahead. Upgrade to Buy from Hold. Target rises to $1.15 from 70c.
PEXA GROUP LIMITED ((PXA)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0
Following recent June quarter reporting, Goldman Sachs reviews its forecasts for stocks under coverage within the Technology, Media, and Telecommunications (TMT) sector.
The broker raises its target for Pexa Group to $16 from $14.20 and upgrades to Buy from Neutral based on an improved outlook in the core domestic business, reflective of the ongoing recovery for property markets. The broker also rolls-forward its valuation model.
Milestones in the UK are also been progressively achieved, note the analysts.
SCIDEV LIMITED ((SDV)) Upgrade to Buy from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0
SciDev's June-quarter report sharply outpaced Canaccord Genuity's forecasts leading to a 2% beat on the broker's FY24 revenue forecasts.
Earnings (EBITDA) proved a miss as did operating cash flow.
Free cash flow proved a strong beat and the company closed June 30 with a cash balance of $9.4m (the broker forecast $6.7m) with no debt, thanks in part to less capital expenditure and reduced earnout, observes the broker.
Canaccord Genuity forecasts a strong September given tender activity and secured pipeline. EPS forecasts rise 5% for FY25.
Rating is upgraded to Buy from Speculative Buy. Target price rises to 68c from 54c.
SANDFIRE RESOURCES LIMITED ((SFR)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
Sandfire Resources' June-quarter operations report broadly met revised guidance and consensus forecasts with operating costs nosing out Wilsons' forecasts.
C1 costs at both Matsa and Motheo proved a sharp beat, the former due to operating costs and the latter to strong silver credits.
Earnings (EBITDA) outpaced thanks to strong sales.
Rating is upgraded to Overweight from Market Weight to reflect the recent share price retreat. Target price is steady at $9.90.
SPARK NEW ZEALAND LIMITED ((SPK)) Upgrade to Neutral from Sell by Goldman Sachs.B/H/S: 0/0/0
Following recent June quarter reporting, Goldman Sachs reviews its forecasts for stocks under coverage within the Technology, Media, and Telecommunications (TMT) sector.
The broker lowers its target for Spark New Zealand to NZ$4.50 from NZ$4.90 noting softer enterprise revenue is being partially offset by lower costs. The rating is upgraded to Neutral from Sell on valuation.
Goldman's preference among A&NZ telcos is Telstra Group, while TPG Telecom is least preferred and is downgraded to Sell from Neutral.
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