Weekly Reports | Apr 19 2024
Broker Rating Changes (Post Thursday Last Week)
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CORE LITHIUM LIMITED ((CXO)) Upgrade to Hold from Sell by Canaccord Genuity.B/H/S: 0/0/0
All key lithium products saw pricing fall again in the March quarter, notes Canaccord Genuity, driven by ongoing soft demand as purchasers run down their inventories, and due to continued supply additions.
The broker recently suggested lithium pricing has bottomed after noting a recovery in the spodumene price towards the back end of the March quarter. No changes are made to Canaccord's lithium price forecasts.
The rating for Core Lithium is upgraded to Hold from Sell on valuation and the target rises to 15c from 14c. The analysts believe the wet season has likely negatively impacted the Finniss operations.
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AVITA MEDICAL INC ((AVH)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0
With Avita Medical slashing its first quarter guidance to US$11.0-11.3m, Wilsons has downgraded on the stock claiming "plain misjudgement failing to incorporate the longer value analysis committee" from the company.
As per the broker, the company's guidance downgrade suggests a a shortfall of 600 kits in the first quarter, which Wilsons believes may reflect lowering hospital stock piles in anticipation of the potential approval of RECELL GO in May.
However, the broker notes no evidence has emerged to back up this thesis, with the revenue shortfall chalked up to a lack of conversion of new trauma accounts.
The rating is downgraded to Market Weight from Overweight and the target price decreases to $3.03 from $5.42.
DATA#3 LIMITED. ((DTL)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden downgrades Data#3 to Overweight from Buy, while reducing the target price to $8.65 from $9.15.
The broker acknowledges Data#3's long-term strength, especially as a leading reseller of Microsoft software in Australia, but raises concerns about near-term cyclical risks to service revenues and competitive pressures impacting margins.
Excess capacity and deferred client spending lead to downgraded EPS forecasts for FY25 and FY26. The broker no longer sees potential for near-term re-rating given the adjustments in earnings expectations and market conditions.
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