Weekly Reports | Oct 25 2024
Broker Rating Changes (Post Thursday Last Week)
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BEACH ENERGY LIMITED ((BPT)) Upgrade to Hold from Sell by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity highlights Beach Energy reported a "solid" 1Q25 result, compared to a lacklustre previous nine months.
Production rose 10% and sales revenue grew 4% on the previous quarter to $427m. Net debt declined by -$28m and Waitsia guidance was retained. First gas is anticipated in early 2025.
Beach Energy is upgraded to Hold from Sell on valuation grounds with an unchanged target price of $1.25.
LITTLE GREEN PHARMA LIMITED ((LGP)) Upgrade to Speculative Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity notes 1Q25 results for Little Green Pharma could be considered a "watershed" moment, whereby the company reported revenue growth, falling operating expenses and its first positive free cash flow.
These results support the de-risking of the stock, resulting in the analyst lifting revenue and margin forecasts with the elimination of a net debt position.
Target price is raised to 21c from 17c. The stock is upgraded to Speculative Buy from Hold.
METALS ACQUISITION LIMITED ((MAC)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0
Moelis believes Metals Acquisition's Q3 production report was "solid" with lots of progress being made to increase production and lower costs.
The broker believes the company is on track to meet its guidance for 2025, with potential upside for 2026.
The commencement of a separate mining area at QTS South Upper will in due course add both tonnes and grade to the feed blend, the broker adds.
The recent drop in the share price has triggered an upgrade to Buy from Hold. Target price has improved to $25 which, the broker highlights, makes the shares look cheap.
MICHAEL HILL INTERNATIONAL LIMITED ((MHJ)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Jarden upgrades its rating for Michael Hill to Buy from Overweight after an update for the first 14 weeks of FY25 revealed improving trading momentum across all markets.
Sales growth accelerated to 4.3% year-on-year from the 3.2% run-rate reported in the first eight weeks of FY25.
The analysts believe the company has passed an inflection point by returning to positive sales and margin growth and see upside risk to the broker's near-term earnings forecasts.
Jarden's target price rises to NZ80c from NZ78c.
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DOMAIN HOLDINGS AUSTRALIA LIMITED ((DHG)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden raises target prices for the four online classified stocks under the broker's research coverage after updating forecasts for recent listing volumes data and to reflect the analysts' lower risk-free rate assumptions.
The broker's target for Domain Holdings Australia rises by 10c to $3.45 and the rating is downgraded to Overweight from Buy after a strong recent share price performance.
METCASH LIMITED ((MTS)) Downgrade to Sell from Neutral by Goldman Sachs.B/H/S: 0/0/0
While still under-penetrated relative to the US, China, and the UK, highlights Goldman Sachs, Australia's online retail penetration reached 11% in FY24, including 7% for supermarkets.
Supported by an expanded range and improved supply chain/last mile infrastructure, the broker anticipates online sales will outstrip offline growth, and reach around 12% for supermarkets by FY30.
For Metcash, Goldman downgrades to Sell from Neutral on market share erosion both in supermarkets and hardware. An acquisition-led strategy is also expected to lower the company's return on invested capital (ROIC) measure.
The target falls to $3.10 from $3.70.
SHEFFIELD RESOURCES LIMITED ((SFX)) Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Sheffield Resources reported production at its Thunderbird mineral sands project was -11-14% below expectations, despite throughput being 3% ahead of forecast.
Petra Capital observes no zircon sales were made during the quarter due to weak market conditions, leading to revenue of $24m, significantly below the broker's forecast of $63m.
A $14m prepayment from the JV partner is expected to provide short-term liquidity. As a result, the broker has downgraded the price target to $0.28 from $0.57 and reduced its NPV estimate.
Sheffield Resources has been downgraded to Hold from Buy.
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