Weekly Reports | 10:54 AM
Broker Rating Changes (Post Thursday Last Week)
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LYNAS RARE EARTHS LIMITED ((LYC)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Lynas Rare Earths' December quarter NdPr/REO production of 1.3kt/2.6kt, respectively, missed Canaccord Genuity's and consensus forecasts, driven mainly by feedstock processing limits and impurity issues with Kalgoorlie.
Sales were in line with the broker's forecast but below consensus, and pricing was also slightly lower vs the broker's estimate.
The broker has lowered its average pricing forecast for FY25 by -10% and also lowered FY25 EBITDA by -18% on lower December quarter production numbers.
No change to price target of $7.5. Rating upgraded to Buy from Hold on valuation grounds.
NORTHERN STAR RESOURCES LIMITED ((NST)) Upgrade to Buy from Neutral by Goldman Sachs and Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Goldman Sachs has updated estimates for Australian gold mining coverage to reflect mark-to-market for December quarter actuals, exchange rate and gold forward curves, an increase in its long-term gold price estimate to US$2,300/oz, ongoing review of asset lives/costs, and company-specific updates.
The broker notes stocks on average are pricing in less than US$2,300/oz, with Northern Star standing out at less than US$2,100/oz. The broker is positive on the outlook for the company on expanded Kalgoorlie Consolidated Gold Mines operations and other asset growth.
With the company going into a 2H production uplift and improving free cash flow generation, combined with other factors, the broker has upgraded Northern Star to Buy from Neutral. Target price lifts to $20.0 from $16.6.
Jarden increased its long-term gold price forecast to US$2,000/oz from US$1,800.
Incorporating this into Northern Star's estimates has resulted in a lift in the target price to $15.8 from $13.0. The rating is also upgraded to Neutral from Underweight.
Looking ahead, the broker expects no change to the company's FY25 guidance of 1.65-1.8moz.
Key catalysts for the remainder of FY25, other than progressing the De Grey Mining ((DEG)) acquisition, include maintaining schedule and budget on the Kalgoorlie expansion, and increasing consistency of delivery from the expanded mills and associated ore sources, the broker says.
SANDFIRE RESOURCES LIMITED ((SFR)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity reviews fundamentals for base metals and electric vehicle materials and updates forecasts for relevant stocks under research coverage.
Overall, the broker lowers its near-term copper, nickel and cobalt pricing, decreases near, mid and long-term lead pricing, and lowers
near-term spodumene and lithium chemicals pricing.
Earnings (EBITDA) revisions were generally lower for all companies under coverage on lower price assumptions, explain the analysts.
Canaccord sees value emerging at Sandfire Resources and upgrades the stock to Buy from Hold. The target falls to 10.75 from $11.25 on the broker's lower near-term copper forecast.
WOODSIDE ENERGY GROUP LIMITED ((WDS)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
In a note looking ahead to 2025 and previewing December quarterly reports, Jarden has retained Brent oil price forecast of US$80/bbl for 1H25 but lowered 2H25 and 2026 forecast to US$75/bbl from US$80. For LNG, the broker forecasts Asian spot LNG to average US$13/mmbtu in 2025 and US$12 in 2026.
Jarden forecasts AUD/USD to average 0.640 in 2025, down from 0.675 previously, and raised interest rate assumption.
For Woodside Energy, the broker forecasts December quarter production of 51.5m barrels of oil equivalent (mmboe), -3% lower than September quarter but marginally higher than 51.1 mmboe consensus.
The forecast for sales volume is 54.1mmboe, -3% below the prior quarter but 2% above consensus.
Jarden's sensitivity analysis for LNG spot price concludes Woodside is more sensitive than Santos ((STO) to a change in spot price assumption from an earnings and dividend perspective.
A combination of lower AUD and higher near-term spot LNG prices, and expected positive news flow around Woodside Louisiana sell-downs, has led to an increase in target price to $27.
The rating is upgraded to Overweight from Neutral.
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