Weekly Reports | Feb 07 2025
Broker Rating Changes (Post Thursday Last Week)
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29METALS LIMITED ((29M)) Overweight by Jarden.B/H/S: 0/0/0
Jarden notes 29Metals achieved all FY24 guidance metrics and issued 2025 guidance consistent with its expectations. The highlight was another quarter of free cash flow from the Golden Grove mine, with $18m exceeding the broker's forecast of $5m.
Unit cost of US$1.81/lb was 11% above Jarden's US$1.63/lb estimates, however, with lower-than-forecast sustaining capital, the AISC of US$3.31/lb was only marginally higher than the broker's US$3.26/lb
The broker's valuation is based on long-term price forecasts of US$4.50/lb for copper and US$1.30/lb for zinc.
The only material change made to the valuation was to include the corporate charge allocated to Golden Grove at the asset level, with the offset being a reduction in corporate costs by the same amount.
Overweight rating with 32c target price.
VAULT MINERALS LIMITED ((VAU)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Vault Minerals delivered a solid operational December quarter, Jarden highlights, with a focus on setting up the King of the Hills plant for expansion, a stronger 24 months at Mt Monger and a pick up in planned exploration and resource extension drilling.
In the broker's view, the company's operations are increasingly set up for material free cash flow boost over the coming years.
Jarden has incorporated increases to its gold price forecasts and lower forex, resulting in a 24% increase in valuation and target price.
Rating upgraded to Buy from Overweight and target price raised to 52c from 42c.
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ACCENT GROUP LIMITED ((AX1)) Downgrade to Neutral from Buy by Jarden and Downgrade to Hold from Buy by Petra Capital.B/H/S: 0/0/0
Jarden highlights Accent Group's 1H25 sales growth of 4.6% year on year was lower than the consensus for 7.5% growth. Gross profit margin and expenses were in line with consensus.
The broker is concerned the promotional environment in the footwear market may take longer to resolve than it initially expected. As a result, it lowered FY25 and FY26 EBIT forecasts by -11% and -9% respectively.
Potential near-term catalysts for the stock include discussions with Frasers Group regarding a long-term strategic agreement which the broker views as "very" positive, fewer promotions from competitors, and likely interest rate cuts.
Target price lowered to $2.10 from $2.35 and rating downgraded to Neutral from Buy.
Accent Group's trading update flagged a slowing in retail sales in the six weeks to Dec 29, rising just 1.8% amid ongoing promotional backdrop, compared with 1H25 like-for-like growth of 2.9%.
Gross margin is expected to be down -100bps versus -70bps at the time of Nov 21 AGM.
Petra Capital has extrapolated the softness in December into 2H25 estimates. These negative revisions are partially offset by model roll-forward, resulting in a cut in target price to $2.28 from $2.35.
The broker now views the stock as trading at fair-value at 17.6x estimated FY25 PE and downgraded the rating to Hold from Buy.
GOLD ROAD RESOURCES LIMITED ((GOR)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0
Gold Road had pre-reported most headline figures, so the main headline from its 4Q24 report was cost which came in at $1,811/oz, below Moelis' expectation of $1,952/oz. The other notable update was FY25 guidance and growth outlook, which the broker reckons is conservative compared with realised rates in FY24.
Cost guidance range of $2,400-2,600/oz was higher than the broker's $2,436/oz estimate but this includes several one-off items. Still, the analyst lifted sustaining capital costs forecasts to sit within the guidance.
Target price $2.55. Rating lowered to Hold from Buy on recent share price rally.
MEDADVISOR LIMITED ((MDR)) Hold by Moelis.B/H/S: 0/0/0
Moelis reckons MedAdvisor's 1H25 result was in line with the weak guidance provided in late December. The broker notes the company seemed reasonably confident of achieving prior guidance for a positive FY25 EBITDA but this is contingent on contract wins in 2H.
The broker highlights the risk of the company needing to look at alternative funding sources if 2H contract wins are weaker than expected. The broker also notes further cost reductions will be required should US revenue remain under pressure.
Moelis remain cautious on the stock until it has a clearer line of sight around the US operations. Rating remains at Hold, but target price is lowered to 21c on EPS downgrades of -57% and -34% in FY25 and FY26 respectively.
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