Weekly Ratings, Targets, Forecast Changes – 14-03-25

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The company is included in ASX20, ASX100, ASX200, ASX300 and ALL-ORDS

Weekly update on stockbroker recommendation, target price, and earnings forecast changes.

By Mark Woodruff

Guide:

The FNArena database tabulates the views of eight major Australian and international stockbrokers: Citi, Bell Potter, Macquarie, Morgan Stanley, Morgans, Ord Minnett, Shaw and Partners and UBS.

For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.

Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.

Summary

Period: Monday March 10 to Friday March 14, 2025
Total Upgrades: 6
Total Downgrades: 4
Net Ratings Breakdown: Buy 60.31%; Hold 32.62%; Sell 7.08%

For the week ended Friday, March 14, 2025, FNArena tracked six upgrades and four downgrades for ASX-listed companies from brokers monitored daily.

Adjustments to both target prices and earnings forecasts proved larger to the downside than any positive revisions, as shown in the tables below.

New Zealand’s fourth largest milk processor Synlait Milk’s average target saw the largest increase after Bell Potter raised its target to 90 cents from 42 cents, following a delayed forecast update in response to management’s upgraded guidance on January 24.

Perhaps the broker was getting in before the release of first half results for Synlait (July year-end) due on March 24.

Signalling a turnaround faster-than-expected by the analysts, management provided first-half earnings guidance of NZ$58-63m, a material uplift from the NZ$36.1m in the first-half of FY24.

Management cited an improved performance in the ingredients business (on better management of currency and product mix), ongoing cost control, and new business development in advanced nutrition products.

As the Synlait share price closed last week at 83.5 cents, up from 36 cents at the time of new guidance, Bell Potter retains its Hold rating.

Primarily for export markets and food manufacturers, Synlait is a B2B supplier of infant formula products, Lactoferrin, and a range of dairy ingredients including skim milk powder, whole milk powder, and anhydrous milk fat.

The release of a new mine plan for the Mt Magnet gold mine in Western Australia, owned by Ramelius Resources, disappointed the market last week, resulting in the largest fall (-9%) in average target price in the table below.

Ord Minnett noted a weaker-than-expected outlook for production, costs, and capital expenditure, driven by a slower-than-expected ramp-up of the Eridanus open-pit cutback at higher costs.

This broker downgraded to Accumulate from Buy, noting a declining production profile from FY26 to FY31 increases pressure on management to pursue inorganic growth opportunities, i.e. go out and find some assets to purchase.

The 10-year production rate for Mt Magnet came in -19% below the consensus estimate, according to Macquarie, and indicated capex of -$823m was twice the broker’s previous estimate.

More positively, Shaw and Partners forecasts production will increase significantly in the FY32-35 period, and only lowered its target to $2.89 from $2.98.

Lotus Resources and COG Financial Services received the largest reductions in average earnings forecasts last week.

While the negative percentage change for Lotus should be ignored due to the small forecast numbers involved, Macquarie’s research highlighted some interesting points for current and potential shareholders.

Both governance and organisational quality are on the improve, according to the broker, as Lotus prepares for its transition to uranium producer.

Along with a strengthened management team, Simon Hay and Leanne Heywood have joined the board, seen as adding respective technical and commercial experience.

Lotus remains the cheapest uranium stock under coverage by Macquarie, and the broker envisages a re-rating relative to peers should the next one or two quarterly updates go well for the Kayelekera mine in Malawi.

The average earnings forecast for COG Financial Services declined by approximately -9% following Morgans’ delayed research update on interim results released on February 26.

Noting a mixed result, the analyst highlighted tougher conditions in the Finance Broking and Aggregation division showing a -3% decline in Net Assets Financed and flat revenue.

Also, while the Asset Management and Lending division experienced robust revenue growth, the broker pointed to margin compression partially due to technology investments.

For the views of Ord Minnett and Bell Potter on COG Financial’s first half, see FNArena’s Corporate Results Monitor, which summarises all the misses and beats from the reporting season at https://fnarena.com/index.php/reporting_season/

Total Buy ratings in the database comprise 60.31% of the total, versus 32.62% on Neutral/Hold, while Sell ratings account for the remaining 7.08%.

Upgrade

ANZ GROUP HOLDINGS LIMITED ((ANZ)) Upgrade to Hold from Reduce by Morgans .B/H/S: 0/5/1

Morgans reckons a common theme from recent big bank quarterlies was a weakening in risk-weighted assets which could reduce buyback or need for more regulatory capital to meet CET1 requirements.

The broker notes credit growth has accelerated according to RBA data, with 6.5% y/y rise in January from 4.9%.

ANZ Bank recorded solid net loan growth in Q1 and a rise in customer deposits but the CET1 capital ratio of 11.5% was affected by an increase in the floor for regulatory capital. The broker believes the higher RWA reduces buyback potential.

The broker made minor changes to EPS forecasts and raised the FY26 dividend forecast, assuming a higher payout ratio of 70%.

Target price lifts to $26.66 from $26.34, and rating upgraded to Hold from Reduce. At current price, the broker estimate the stock is trading at a 5.8% cash yield (70% franked).

CAR GROUP LIMITED ((CAR)) Upgrade to Buy from Hold by Ord Minnett .B/H/S: 5/1/0

Ord Minnett has upgraded Car Group to Buy from Hold on valuation grounds. No change to the $39 target price.

The broker notes one of the reasons for the -15% decline in share price since early February was expectations of a soft 2H for recreational vehicle sales. But its recent calls with US-based dealers indicated a modest recovery in sales since January.

Overall, the broker expects the impact of tariffs on sales to be modest and higher used car sales to offset some of the declines.

CHARTER HALL GROUP ((CHC)) Upgrade to Buy from Neutral by Citi .B/H/S: 2/2/1

Citi reminds investors expected lower interest rates, in Australia and globally over 2025, typically results in multi-year positive share price performance for REITs.

While uncertainty in trade policies and the expectation of higher inflation has resulted in the recent selldown of Australian REITs, the broker highlights longer-term bond yields have largely remained stable.

For Charter Hall, the broker retains its $18.50 target and upgrades to Buy from Neutral, expecting the return of equity flows into Australia.  Multiples tend to expand in periods of funds under management (FUM), note the analysts.

COLES GROUP LIMITED ((COL)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 5/2/0

Morgan Stanley continues to emphasise exposure to staples over discretionary due to relative valuations, with the former more attractive.

The broker expects Woolworths Group will see a higher margin uplift than Coles Group between now and FY26, but Coles is closing the margin gap on Woolworths, the analyst states.

Coles continues to gain relative market share, which is expected to be an ongoing trend, while Woolworths is generating more revenue from e-commerce.

Losses to non-grocery retail remain a “headwind,” Morgan Stanley highlights, but losses are declining. Volumes per capita at an industry level remain under pressure, although some upside risks from inflation exist.

Coles Group is upgraded to Overweight from Equal-weight. Target price is lifted to $21.70 from $18.40. View: In-Line.

The broker retains an Underweight rating on JB Hi-Fi ((JBH)), Harvey Norman ((HVN)), and Super Retail Group ((SUL)).

LIFESTYLE COMMUNITIES LIMITED ((LIC)) Upgrade to Buy from Neutral by Citi .B/H/S: 3/1/0

Citi reminds investors expected lower interest rates, in Australia and globally over 2025, typically results in multi-year positive share price performance for REITs.

While uncertainty in trade policies and the expectation of higher inflation has resulted in the recent selldown of Australian REITs, the broker highlights longer-term bond yields have largely remained stable.

For Lifestyle Communities, the broker upgrades to Buy from Neutral and maintains its $9.70 target, highlighting management’s renewed focus on balance sheet strength and the appointment of a new CEO as additional positives.

The broker also feels Lifestyle Communities is a potential takeover target.

WESTPAC BANKING CORPORATION ((WBC)) Upgrade to Hold from Reduce by Morgans .B/H/S: 1/1/3

Morgans reckons a common theme from recent big bank quarterlies was a weakening in risk-weighted assets which could reduce buyback or need for more regulatory capital to meet CET1 requirements.

The broker notes system credit growth accelerated according to RBA data, with a 6.5% y/y rise in January from 4.9%, and housing credit is now growing in line with the trend, based on APRA data.

Westpac’s housing credit is growing below the system rate but the bank is leading the sector’s strong lending growth to non-financial businesses, the broker notes.

The broker highlights the bank’s net profit rose 3% in 1Q vs 2H24 as higher revenue offset costs and impairment charges were subdued. The bank’s RWA increase was partly due to higher IRRBB.

The analyst cut FY25-27 EPS forecasts mainly on lower net interest margins and lifted RWA forecasts by 3-6%. The decline in DCF-based valuation on increased CET1 investment was offset by higher assumed terminal returns.

Target price rises to $27.85 from $27.77. Rating upgraded to Hold from Reduce.

Downgrade

AUDINATE GROUP LIMITED ((AD8)) Downgrade to Underperform from Neutral by Macquarie .B/H/S: 1/2/1

Macquarie notes product mix is a material near-term driver for Audinate Group, with embedded software gross profit per unit suggesting headwinds and a recovery in Ultimo diluting revenue drivers.

The broker highlights the company controlled costs in a softer demand environment but the Rule of 40 still declined to -67% in 1H25. The broker expects soft demand to persist.

The broker cut the FY25 EPS forecast by -2% and FY26 by -27%. Target price drops to $6.30 from $8.70, and the rating is downgraded to Underperform from Neutral.

HELIA GROUP LIMITED ((HLI)) Downgrade to Underperform from Neutral by Macquarie and Downgrade to Underperform from Neutral by Macquarie .B/H/S: 0/0/1

Macquarie sees two risks for Helia Group — normalisation of claims and some uncertainty over the renewal of LMI contract with Commbank ((CBA)).

The broker’s base case is the contract will be renewed but believes investors need to factor in the risk of changes like pricing or even that the contract will be dropped.

The broker reiterates its view claims will remain low in the near term but doesn’t think the negative claims trend is sustainable.

Rating downgraded to Underperform from Neutral. No changes to forecasts and target price maintained at $4.20.

Macquarie sees two risks for Helia Group — normalisation of claims and some uncertainty over the renewal of its LMI contract with CommBank ((CBA)).

The broker’s base case is the contract will be renewed but Macquarie also believes investors need to factor in the risk of changes like pricing or even that the contract might be dropped.

The broker re-iterates its view claims will remain low in the near term but doesn’t think the negative claims trend is sustainable.

Rating downgraded to Underperform from Neutral. No changes to forecasts and target price maintained at $4.20.

RAMELIUS RESOURCES LIMITED ((RMS)) Downgrade to Accumulate from Buy by Ord Minnett .B/H/S: 2/1/0

Ramelius Resources’ new mine plan for Mt Magnet disappointed the market, notes Ord Minnett, with a weaker-than-expected outlook for production, costs, and capital expenditure.

These outcomes more than offset longer-term improvements expected beyond FY32, suggests the analysts.

The weaker outlook was driven by a slower-than-expected ramp-up of the Eridanus open-pit cutback at higher costs, explains the broker.

It’s felt a declining production profile from FY26 to FY31 increases pressure to pursue inorganic growth opportunities. Ord Minnett lowers its target to $2.35 from $2.90 and downgrades to Accumulate from Buy.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup <img src="https://www.fnarena.com/charts/fnarena/3dbar.php?mydata=1&mylabels=BellPotter,Citi,Macquarie,MorganStanley,Morgans,OrdMinnett,ShawandPartners,UBS&b0=201,138,178,98,236,260,167,129&h0=125,138,161,110,182,139,24,171&s0=8,31,38,47,19,30,4,36″ style=”border:1px solid #000000;”>

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