Weekly Reports | 10:30 AM
Broker Rating Changes (Post Thursday Last Week)
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CHAMPION IRON LIMITED ((CIA)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden lowers its target for Champion Iron to $6.91 from $7.47 and downgrades to Overweight from Buy.
The target falls due to a - 7% reduction in the broker's FY27 P65 grade (65% iron content) price average forecast, offset marginally by a lower assumed weighted average cost of capital (WACC).
The analysts forecast a price realisation for 66.2% Bloom Lake concentrate of US$120.8/dmt compared to the US$126.1/dmt average for the June quarter.
Underpinning the broker's Overweight rating, is the new DRPF 69% iron project which is progressing well, notes the broker. The low impurity DRPF product is a strategic differentiator helping achieve materially improved prices, explains Jarden.
TECHNOLOGY ONE LIMITED ((TNE)) Downgrade to Neutral from Buy by Goldman Sachs.B/H/S: 0/0/0
Since adding TechnologyOne to a Buy rating on June 26, 2023, Goldman Sachs points to a 61% rally in the share price versus the ASX200 which is up 16%.
The stock has re-rated to a price-to-earnings valuation of 56x from 40x since the May 2024 results. The broker notes the stock is now trading above the upgraded share price target of $24.05, hence the downgrade to Neutral from Buy.
Goldman Sachs explains growth in annual recurring revenue is around mid-teens out to FY30, supporting $1bn in annual recurring revenue. With SaaS margins over 80%, profit before tax growth rate of 15%-20% is viewed as the "new normal".
The broker is looking to FY24 results in November for further indications of momentum in UK or cross-selling of its SaaS.
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