Weekly Reports | 11:00 AM
Broker Rating Changes (Post Thursday Last Week)
Downgrade
PETER WARREN AUTOMOTIVE HOLDINGS LIMITED ((PWR)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Peter Warren Automotive's 1H guidance proved well below both Jarden's and consensus forecast, prompting the broker to downgrade earnings estimate and target price.
The company revealed new car revenue and margins have been adversely affected by lower demand and a significant oversupply of new vehicles in the market.
Jarden lowered the rating to Overweight (one step above Neutral) from Buy, on optimism that demand could get a boost from improvement in cost of living pressures, given the potential for interest rate cuts in 2025.
Also, while oversupply could drive further gross margin compression, Jarden expects management initiatives to offset further headwinds going forward.
New target price down to $1.90 from $2.10.
SYRAH RESOURCES LIMITED ((SYR)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden is reviewing the impact of Syrah Resources' declaration of force majeure at the Balama mine in Mozambique that's triggered default events on two debt facilities.
Jarden notes it's unclear whether the second loan disbursement of US$47m on US International Development Finance Corp's US$150m loan facility remains available to Syrah. The other debt facility is a fully-drawn US$102m from the US Department of Energy.
The broker considers the best possible outcome for shareholders to be a rapid resolution with the lenders, leading to a waiver of the default clause.
The worst outcome would be a requirement to repay one or both debt facilities. The latter would prove challenging without additional funding, given Syrah's last reported cash balance of US$113m.
Jarden lowers the target price to $0.30 from $0.57 and downgrades its rating to Neutral from Overweight.
The full story is for FNArena subscribers only. To read the full story plus enjoy a free two-week trial to our service SIGN UP HERE
If you already had your free trial, why not join as a paying subscriber? CLICK HERE