Weekly Reports | 10:00 AM
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 May 5 to Friday May 9, 2025
Total Upgrades: 5
Total Downgrades: 12
Net Ratings Breakdown: Buy 61.36%; Hold 32.21%; Sell 6.43%
In the week ending Friday, May 9, 2025, FNArena tracked five upgrades and twelve downgrades for ASX-listed companies from brokers monitored daily.
For the second week in a row, the top ten percentage falls in average target prices and average forecasts in the tables below were consistently larger than rises.
29Metals received the largest fall in earnings forecast by brokers but the percentage change was exaggerated by small forecast numbers in FY25.
March quarter copper production missed Citi's forecast by around -20% as a result of lower output at the Golden Grove mine, while zinc production beat the broker's estimate.
Morgan Stanley's 2026 and 2027 group EPS forecasts were lowered by -8.4% and -15.3%, respectively, mainly driven by higher cost forecasts at Golden Grove.
Group cash declined by -$86m quarter-on-quarter to $166m and Citi now includes receipt of a final $54m insurance payout in the current quarter following an extreme weather event at Capricorn Copper in March 2023.
Sell-rated Citi pointed out 29Metals is heavily leveraged to base metals pricing and maintained a view additional liquidity will be needed in the medium-term. This broker's target price was reduced to 12c from 16c.
More positively, the analysts reminded investors copper should be an immediate beneficiary when and if the US starts to ease tariff policies.
Uranium miner Boss Energy and global provider of travel solutions Corporate Travel Management are next on the earnings downgrade list.
Following third quarter results for Boss, Morgan Stanley downgraded its FY25 revenue forecast by -30.5% driven by no sales of Alta Mesa (South Texas) product in FY25 and reduced sales assumed at the Honeymoon project in South Australia.
Regarding Honeymoon, here the broker's bull case valuation rose by 60c reflecting expansion potential, pushing up the target price for Boss to $2.70 from $2.45 after a further re-weighting towards the bull case scenario.
After Ord Minnett measured the trade volumes for both Boss Energy and Paladin Energy, the two most shorted stocks on the ASX since April 28, the broker suggested current short-covering rallies for their respective share prices will persist.
All seven daily covered brokers in the FNArena database last week passed judgment on Corporate Travel Management's trading update on May 2, resulting in falls for the average earnings forecast and target price of around -20% and -14%, respectively.
While FY25 guidance was downgraded, with group revenue down by -$29m and earnings revised lower, the analyst at UBS highlighted strong new client momentum.
After reducing its target to $13.55 from $17.60, this broker upgraded to Buy from Neutral in the belief the current share price reflects sufficient downside risk from macroeconomic uncertainty, particularly in the US.
Morgan Stanley downgraded its rating to Equal-weight from Overweight after lowering EPS forecasts by between -28% to -36% across FY25-FY27. This broker noted travel peers have not been immune to downgrades, and, as a result, Corporate Travel Management is no less competitive.
In a developing theme, sector peer Helloworld Travel appeared third on the table for negative changes to targets, behind second placed Reliance Worldwide.
Management at Helloworld downgraded earnings guidance to $52m-$56m from $56m-$62m, on a mix of positive and negative structural and cyclical factors. Ord Minnett noted a change in customer behaviour to short-haul destinations like Asia rather than the US and Europe.
This new trend translates to a reduction in travel spend per trip and overrides paid by airline carriers to these regions, while younger travellers are transitioning away from traditional travel agents.
Positively, management noted forward booking volumes for FY26 have been strong.
Reliance Worldwide's average target fell by nearly -10% last week after management flagged a -US$25-35m hit to FY26 earnings due to a weaker outlook for US housing and renovation demand, and a projected -US$30m net tariff impact.
Around 30% of Reliance's cost of goods sold is exposed to potential US tariffs, noted the analysts at UBS, but management is targeting mitigation via sourcing diversification, price increases, and cost management.
Macquarie could see upside risk to this lower guidance, as management has factored in current tariff settings when there is potential for an improving scenario.
UBS also noted Reliance remains well positioned in the US plumbing market as the only push-to-connect manufacturer.
On the flipside, average targets for Strike Energy and Lynas Rare Earths climbed by around 15% and 7%, respectively.
The higher target for Strike Energy was solely the result of a target price being reintroduced into the FNArena database for Ord Minnett after a research hiatus by the broker.
While Ord Minnet's 31c target is higher than two other brokers in the database, last week the broker downgraded its crude oil price forecasts to US$60/bbl from US$70/bbl in 2025, and to US$70/bbl from US$80/bbl in 2026.
The broker's FY26 EPS estimate for Strike was accordingly lowered by around -18%, and the rating was downgraded to Hold from Buy.
Within the Oil and Gas sector, the analysts favour Buy-rated refiners Ampol and Viva Energy.
Lynas Rare Earths' higher target resulted from UBS becoming more upbeat on the ex-China rare earths space.
In a positive for the company, low price settings to date have restricted new entrants outside China, which sees Lynas uniquely positioned with ready capacity to underpin growing ex-China requirements, highlighted the broker.
Further, the imminent addition of dysprosium (Dy) and terbium (Tb) capacity adds incremental value, noted UBS, which also raised its terminal NdPr volume forecast to 14kt from 12kt.
Also experiencing a positive week in earnings forecasts, Global Lithium Resources and Evolution Mining head up the table below.
Macquarie noted Global Lithium Resources has recommenced definitive study works on the spodumene-dominant hard rock lithium Manna project, with a focus on improving economics.
The broker lowered its exploration and other cost assumptions, which reduced forecast earnings losses by between -8% to -53% over FY25-FY29, helping lift the analyst's target price by 8% to 14c. The Underperform rating was retained.
For the Gold sector, Citi concluded last week valuation matters little at the moment against the macro-economic backdrop, and gold stocks will likely continue to follow gold prices higher.
Conceding Evolution was "prematurely" downgraded to Neutral from Buy in January, the broker raised its target to $8.50 from $7.00.
Total Buy ratings in the database comprise 61.36% of the total, versus 32.21% on Neutral/Hold, while Sell ratings account for the remaining 6.43%.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE