Weekly Reports | 10:30 AM
Broker Rating Changes (Post Thursday Last Week)
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AMPOL LIMITED ((ALD)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0
Goldman Sachs notes Ampol reported a weaker-than-expected 4Q24 result with $45m Lytton gross profit -$5m below its estimate.
The broker notes the international trading segment continued to struggle over Q4 impacted by low market volatility but assumes gradual recovery over 2025. Unaudited 2024 EBITDA of $1.2bn was 4% below Goldman's $1.25 estimate.
Ahead of FY24 result on Feb 24, the broker estimates $1.2bn underlying EBITDA, $237m net profit, and $4.1bn net debt.
The broker revised FY24/25 EBITDA by -2/-2% primarily adjusting for lower international earnings and higher Lytton operating expense.
Target price reduces to $32.0 from $32.3. Rating upgraded to Buy on attractive valuation and defensive refining exposure, plus an anticipated 2025 earnings recovery.
ARISTOCRAT LEISURE LIMITED ((ALL)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0
Reflecting Goldman Sachs' preference for high quality companies with a track record of delivering strong and certain earnings growth, the broker upgrades Aristocrat Leisure to Buy from Neutral after raising the target to $78 from $70.
The broker highlights Aristocrat's record North American installations in 2024, reinforcing market dominance and enabling over 40% market share.
Earnings growth is further bolstered by currency tailwinds and synergies between Aristocrat's land-based and social casino segments, explain the analysts.
Balance sheet strength also underpins the company's capacity for buybacks and mergers and acquisitions, highlights Goldman Sachs.
CORE LITHIUM LIMITED ((CXO)) Upgrade to Market Weight from Underweight by Wilsons.B/H/S: 0/0/0
In a report looking into 2025, Wilsons reviews seven key talking points for the lithium market covering demand, supply, inventories, geopolitical noise, M&A and how geography could be a key differentiator for new projects moving forward.
Despite being in the midst of an over-supplied market for lithium, the broker believes market rebalancing is underway but the pace will be relatively sedate.
The broker acknowledges its lithium price profile was too optimistic previously, lowering it to a broadly flat forecast versus spot price over the next three years -- US$850/t SC6 and US$11,000/t carbonate, before progressively moving up. The new price profile sits slightly below consensus estimates for the coming years.
In the case of Core Lithium, the broker is not forecasting a resumption of operations at Finniss project in the next two years and therefore sees minimal changes from its revised lithium prices and mark-to-market adjustments.
Target price retained at 10c but rating upgraded to Market Weight from Underweight.
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