In Case You Missed It – BC Extra Upgrades & Downgrades – 12-04-24

Weekly Reports | Apr 12 2024

Broker Rating Changes (Post Thursday Last Week)


CLOVER CORPORATION LIMITED ((CLV)) Upgrade to Speculative Buy from Outperform by Taylor Collison.B/H/S: 0/0/0

Taylor Collison upgrades its rating for Clover to Speculative Buy from Overweight noting the company is an attractive acquisition target for a larger company, as evidenced by all of its competitors operating as divisions in larger businesses.

Clover is the world leader in the manufacture of micro-encapsulated Docosahexaenoic Acid (DHA), which the broker explains is predominantly sold to infant formula manufacturers.

The company's 1H revenue (results on March 20) of $27.3m was a miss against the analyst's $32m forecast due to issues in the Chinese (change of standards) and Middle Eastern markets (related to inventories from a manufacturer of infant formula).

No target price is mentioned in Taylor Collison's latest research.

HUB24 LIMITED ((HUB)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0

Wilsons upgrades EPS forecasts for Hub24 by 1-2% driven by mark-to-market upgrades and some small increases to forecasts for gross inflows, reflecting periods of forced migrations from peers.

Over the next two years, the broker forecasts close to $100bn in funds under administration (FUA) will be forcibly moved between incumbent Platforms, providing a tailwind for Hub24 to achieve FUA of over $100bn.

Wilsons upgrades its rating to Overweight from Market Weight and lifts its target to $45.32 from $42.63.


CHAMPION IRON LIMITED ((CIA)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Jarden downgrades its rating for Champion Iron to Overweight from Buy and reduces the target to $7.76 from $9.24 largely due to the impact on forecasts of a further softening for iron ore prices.

Management has also telegraphed a soft quarter-on-quarter outcome for the upcoming March quarter release on April 23, as optimisation/maintenance will impact on production.

Jarden continues to like both Champion Iron's strategic differentiation and organic growth optionality. However, iron ore benchmarks are expected to correct further due to both China's economic challenges and the looming Simandou development in the Republic of Guinea.

FLIGHT CENTRE TRAVEL GROUP LIMITED ((FLT)) Downgrade to Sell from Neutral by Goldman Sachs.B/H/S: 0/0/0

Competition in the small and medium enterprise corporate travel segment appears to be intensifying, with potential to drive margin disappointment for Flight Centre Travel shareholders, says Goldman Sachs. 

The broker notes there is increasing focus on proprietary technology to drive a competitive advantage. 

Coupled with moderating corporate travel, now expected to plateau at around 75% of pre-covid demand, Goldman Sachs has lowered its expectations for Flight Centre Travel's corporate segment, now forecasting profit before tax and total transaction value margins of 2.1% and 2.2%. 

The rating is downgraded to Sell from Neutral and the target price decreases to $18.30 from $20.10.

ORECORP LIMITED ((ORR)) Downgrade to Hold from Spec Buy by Canaccord Genuity.B/H/S: 0/0/0

Perseus Mining has won the battle for OreCorp and Canaccord Genuity notes its equity ownership has now risen beyond 50% while the offer has been declared unconditional.

The chances for a competing offer are now considered pretty close to zero.

OreCorp's key asset, the Nyanzaga gold project, located in Tanzania, is seen as one of the higher quality gold developments on the ASX.

Canaccord Genuity has downgraded its rating for OreCorp to Hold from Speculative Buy and lifted the price target to $1.20, in line with the bidder's offer.

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