Weekly Reports | Nov 22 2024
Broker Rating Changes (Post Thursday Last Week)
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NUIX LIMITED ((NXL)) Upgrade to Buy from Hold by Petra Capital.B/H/S: 0/0/0
Nuix has reiterated its guidance for annual contract value (ACV) growth of 15% and revenue exceeding costs for FY24, with a stronger second-half weighting due to renewal cycles in June and December, notes Petra Capital.
Management anticipates these renewals will incorporate value-based pricing models and productivity-focused solutions like NEO, supporting long-term revenue growth.
While no changes have been made to forecasts, the broker highlights Nuixs ability to secure better pricing terms through value-based selling, incentivised by newly introduced KPIs.
Petra Capital upgrades the rating to Buy from Hold and raises the target price to $6.91 from $6.73.
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ARISTOCRAT LEISURE LIMITED ((ALL)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden highlights Aristocrat Leisure reported strong FY24 results with NPATA reaching $1.6bn, up 17%, supported by a 12% increase in segment profits and 5% revenue growth.
Gaming operations saw record installations, with margins expanding due to strong product performance. Pixel United delivered 12% profit growth despite flat bookings, benefiting from cost controls. The sale of Plarium and the strategic review of Big Fish reflect the company's focus on higher-margin businesses.
Jarden revised EPS forecasts slightly upwards for FY25-FY27, with the target price raised to $61.00 from $59.00.
The broker remains positive on the company's market position, but downgrades the rating to Neutral from Overweight, due to valuation concerns after recent share price outperformance.
ALS LIMITED ((ALQ)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
ALS Ltd's 1H25 core profit of $152m came in slightly ahead of consensus at $150m, driven by stable performance in Life Sciences and resilience in Commodities margins despite volatile geochemistry sampling flows, notes Jarden.
Commodities division EBIT margins remained robust at 31%, driven by larger miners contributing 70-75% of testing flows, though the broker observes sampling flow growth declined by -0.5% year-on-year.
Life Sciences achieved growth through organic expansion and contributions from recent M&A (including Nuvisan), highlights the analyst.
Jarden downgrades ALS Ltd to Neutral from Overweight, citing limited near-term earnings catalysts, and increases the target price to $14.40 from $14.25.
HEALIUS LIMITED ((HLS)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
The Healius AGM revealed a downgrade in the outlook for the Pathology division, with no details provided on the margin deterioration, notes Jarden.
The recent sale of Lumus Imaging, expected to complete in early 2H25, leaves management focusing on remaining operations. Stranded costs from the sale and potential funding cuts pose challenges to the earnings outlook, suggest Jarden.
Management intends to return proceeds from the Lumus sale to shareholders via a special dividend, unlocking $160m in franking credits.
The broker downgrades FY25-27 EPS forecasts by -88.7%, -47.9%, and -42.7%, respectively, and lowers the target price to $1.25 from $1.67. The rating is downgraded to Underweight from Neutral.
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