Weekly Reports | Aug 16 2024
Broker Rating Changes (Post Thursday Last Week)
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EVT LIMITED ((EVT)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Due to much better hotel market conditions and an improving outlook for cinemas, Jarden upgrades its rating for EVT Ltd to Buy from Overweight. The broker sees upside risk to FY24 results.
While Thredbo is having weak snowfall to start the year, the analysts suggest improving conditions may surprise investors who are currently concerned by the 1H FY25 outlook.
The target rises to $12.44 from $11.31.
GENESIS ENERGY LIMITED ((GNE)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Prior to Genesis Energy's FY24 results due on August 22, Jarden anticipates a rebound in earnings following a problematic year and upgrades its rating to Buy from Overweight.
From among Jarden's coverage of four listed Gentailers, Genesis is expected to benefit most from a falling yield environment.
The broker's target rises to NZ$2.82 from NZ$2.78 on a higher near-term earnings outlook as the company maximises its coal
stockpile into the elevated wholesale price period.
The broker forecasts FY24 earnings (EBITDA) of NZ$406m, below managemet's guidance for between NZ$410-415m.
TRANSURBAN GROUP LIMITED ((TCL)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Transurban Group's FY24 result broadly met consensus forecasts and appears to have pleased Jarden. FY25 dividend guidance was in line, implying a 5.1% yield.
The broker appreciates the company's cost control but expects uncertainty surrounding the NSW Toll Review and the company's M&A plans will continue to weight.
Rating upgraded to Neutral from Underweight, the broker suspecting recent share price weakness should set a floor for the company, given the dividend yield.
Target price falls to $12.40 from $12.70 to reflect earnings (EBITDA) downgrades of roughly -1% between FY25-FY27. FY25 EPS forecasts fall sharply.
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AROA BIOSURGERY LIMITED ((ARX)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Aroa Biosurgery's June-quarter result largely met consensus forecasts and management reiterated FY25 revenue guidance (based on an NZD/USD exchanged rate of 64c).
The broker suspects FX movements could shift the dial in Aroa Biosurgery's favour (spot is 60c).
Jarden observes the company's inventory issues appear to have been cleared and expects positive operating cash flow in the December half.
EPS forecasts fall sharply, reflecting a change of lead analyst.
Rating is downgraded to Neutral from Overweight. Target price slumps -29% to 71c from $1, to reflect the analyst's expectation of a longer road to improved valuation.
AURIZON HOLDINGS LIMITED ((AZJ)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Aurizon Holdings reported FY24 core earnings -11% below Jarden's estimate. The large earnings miss was driven by higher-than-forecast net interest expenses, which the company expects to remain at this level in FY25.
With rising capital intensity, the broker sees a path to lower near-term earnings growth, which it believes will likely weigh on Aurizon's share price.
With the expectation of significant downgrades to the consensus earnings outlook and the considerable difference between Jarden's earnings forecasts and consensus, the broker downgrades to Underweight from Neutral. Target falls to $3.25 from $3.75.
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