Weekly Reports | 11:00 AM
A summary of the highlights from Broker Call Extra updates throughout the week past.
Broker Rating Changes (Post Thursday Last Week)
Upgrade
NICK SCALI LIMITED ((NCK)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden raises its target for Nick Scali to $20.68 from $17.71 and upgrades to Overweight from Neutral following FY25 results and a trading update.
The FY25 A&NZ performance exceeded the broker's expectations and UK gross margins are tracking ahead of plan, helping offset a slower UK sales ramp.
Group FY25 earnings (EBITDA) missed consensus by around -1%, but A&NZ earnings beat by circa 4% on stronger opex control and a small revenue beat.
A&NZ order momentum is solid, highlight the analysts, with 2H25 written sales orders up 7.3% year-on-year and July up 7.7%, though store rollout guidance of 48 sites by June next year is slightly below consensus.
In the UK, sales remain around -50% below the consensus estimate due to refurbishments and staffing gaps, explains the broker, but 2H25 gross profit margins were around 400bps above consensus.
FY26 guidance for gross profit margins is for between 57–59%, with potential to reach 60% from FY27.
Jarden lifts A&NZ earnings (EBIT) forecasts by 8–13% across FY26–28 on strong revenue momentum and disciplined cost control, partly offset by UK earnings downgrades on a slower sales uplift.
Risks include promotional intensity, macro conditions, and UK execution, cautions the broker.
Downgrade
CHARTER HALL SOCIAL INFRASTRUCTURE REIT ((CQE)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0
Charter Hall Social Infrastructure REIT's FY25 results were in line with guidance, but FY26 distribution guidance was 5% higher than Moelis' forecast.
The broker notes like-for-like rents rose 4.3% in FY25 vs 3.4% in FY24, and while most of FY26-27 rent reviews are capped, net operating income is still estimated to be above 3% long-term.
Upgrades to forecasts are largely driven by asset remixing and lower interest rate outlook.
Target price $3.39. Rating downgraded to Hold from Buy.
CARNARVON ENERGY LIMITED ((CVN)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity notes key milestones for Carnarvon Energy during the June quarter included up to 19.99% strategic investment in Strike Energy ((STX)) for up to -$89m.
The broker doesn't see prospect for material synergies, should there be a merger in future, and believes the company didn't properly articulate the rationale behind the current investment.
The company is investigating alternative options to accelerate the Dorado development and is working with the JV partners. The quarter ended with $97m in cash post the Strike investment, and no debt.
Rating downgraded to Hold from Speculative Buy. Target cut to 14c from 26c.
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