In Case You Missed It – BC Extra Upgrades & Downgrades – 21-02-25

This story features CHARTER HALL RETAIL REIT, and other companies. For more info SHARE ANALYSIS: CQR

The company is included in ASX200, ASX300 and ALL-ORDS

Broker Rating Changes (Post Thursday Last Week)

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CHARTER HALL RETAIL REIT ((CQR)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0

Charter Hall Retail REIT reported 1H25 earnings per unit of 12.6c and a dividend of 12.3c, and reiterated full-year guidance.

Moelis reckons the REIT’s operating performance remained strong in the context of a tough consumer environment

The broker expects Charter Hall’s ((CHC)) acquisition of Hotel Property Investments ((HPI)) will result in the REIT owning 50% of the latter portfolio by June.

The analyst expects the deal to be marginally dilutive near-term, but expects this to resolve on Hotel Property’s relatively high embedded rent growth and expected RBA rate cuts.

Target price rises to $3.94 from $3.89, and rating upgraded to Buy from Hold.

DATA#3 LIMITED. ((DTL)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0

Data#3 provided a strong first half result in a challenging environment, Wilsons assesses. The broker highlights services gross sales, with this the first period where services were meaningfully greater than product gross margin.

In light of this, and with the balance of risks to the upside over the coming year, the rating is upgraded to Overweight from Market Weight. Wilsons increases FY25 revenue estimates by 3% and the target to $9.75 from $9.23.

FISHER & PAYKEL HEALTHCARE CORPORATION LIMITED ((FPH)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0

Wilsons upgrades Fisher & Paykel Healthcare to Overweight from Market Weight, noting the new rating already reflects strong CDC data in emergency departments (ED) and the -12% fall in share price from pre-tariff highs.

The broker believes the spike in ED visits signals a “severe” flu season compared with the company’s “moderate” expectation. This could bolster a potential beat to FY25 sales and net profit guidance.

Additionally, Wilsons has not adjusted forecasts for potential tariff impost but with the tariff already in the price, the analyst believes both the potential scenarios from here are positive for the stock.

Target price retained at $35.

GRAINCORP LIMITED ((GNC)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0

Wilsons notes GrainCorp’s FY25 trading update and guidance fell short of consensus forecasts, driven by lower margins. 

The company announced an intention for on-market share buy-back of up to $50m and to progress the feasibility assessment of a renewable fuels facility with MOU partners Ampol ((ALD)) and IFM investors.

The broker left FY25 earnings broadly unchanged but lowered FY26 earnings on anticipated lower volumes in agribusiness and lower margins in the nutrition and energy business.

Rating upgraded to Overweight from Market Weight. Target price $8.91.

GPT GROUP ((GPT)) Neutral by Jarden.B/H/S: 0/0/0

GPT Group’s new management team has further clarified its strategy of growing external assets under management and improving returns, although execution in a crowded funds management market is now key, Jarden suggests.

Initial FY25 funds from operations guidance suggests less initial dilution than feared, but based on the headwind of interest expense, recent asset sales and lower trading profits, Jarden believes this could still prove ambitious.

After recent underperformance, expectations are arguably low, but the broker believes investors have attractive pure-play alternatives for Malls, an Office recovery or the interest rate sensitivity of funds.

The -7.5% discount to NTA and 4.9% dividend yield suggest to Jarden a risk-reward that is fairly balanced. Target rises to $5.10 from $4.95. Neutral retained.

HOMECO DAILY NEEDS REIT ((HDN)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0

HomeCo Daily Needs REIT’s 1H25 funds from operations proved marginally short of Moelis’ estimates. The REIT reiterated FY25 guidance of 8.8c which requires a slightly stronger 2H but management attributed it to the timing difference between acquisitions and divestments.

The broker highlights the REIT’s portfolio performance has shown consistent operating metrics improvement over the last 4-5 years, reflective of the management’s strategy execution and overall portfolio curation.

Target price rises marginally to $1.36 from $1.35. Rating upgraded to Buy from Hold on recent share price weakness.

OPTHEA LIMITED ((OPT)) Upgrade to Market Weight from Underweight by Wilsons.B/H/S: 0/0/0

Opthea is expected to provide phase III readouts this year for its sozinibercept drug, and Wilsons considers the current share price assumes a positive outcome.

Full de-risking of the drug should support an unrisked price target of $2.08, the broker calculates, raising its target to $1.00 from $0.28.

If approved, Wilsons expects utilisation patterns of the drug to be dramatically different to protocol use in the phase III, noting the product specification as an add-on to the standard care in retinal disease remains controversial.

The rating is upgraded to Market Weight from Underweight.

ORIGIN ENERGY LIMITED ((ORG)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0

Further to the first half results from Origin Energy, which were in line with Jarden’s estimates, the rating is upgraded to Neutral from Underweight.

The broker was surprised by the unchanged guidance for emerging markets EBITDA despite the positive first half performance and does factor in higher earnings through the forecast period.

The target is reduced to $10.25 from $10.45, largely related to APLNG, where Jarden still awaits answers on the near-term production outlook and whether reserves are impacted.

XRF SCIENTIFIC LIMITED ((XRF)) Upgrade to Buy from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0

XRF Scientific posted a “solid” first half result which Canaccord Genuity believes is stronger than it appears at face value. EBITDA and pre-tax profit were ahead of expectations, underpinned by resilient margins.

There is strength in international customer demand and added capabilities now considerably enhance cross-selling potential. The broker moves the rating to Buy from Speculative Buy and raises the target to $2.22 from $1.75.

Downgrade

BLUESCOPE STEEL LIMITED ((BSL)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0

BlueScope Steel’s 1H25 result was at the high end of previously lowered guidance, boosted by -$25m in realised cost savings. The operating result highlighted operational challenges still remain, Jarden notes. Australia exceeded guidance/expectations, while North America disappointed.

Realising -$200m in sustained cost savings net of inflationary pressures requires flawless execution, the broker suggests, particularly given no accompanying significant item/permanent charges.

Jarden is constructive on BlueScope, but views its strategy, financial discipline and management team and earnings profile as already in the share price. Target rises to $23.20 from $21.80. Downgrade to Underweight from Neutral.

BRAMBLES LIMITED ((BXB)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Jarden has downgraded Brambles Ltd to Neutral from Overweight; with an increased target price of $19.45, up from $17.90 following a strong re-rating and increase in the company’s share price.

COMMONWEALTH BANK OF AUSTRALIA ((CBA)) Downgrade to Sell from Underweight by Jarden.B/H/S: 0/0/0

Jarden views CommBank’s 1H result as “clean and simple” and likes the flexible and forward-looking investment mindset.

Headline net interest margin was better than expected at 208bps, but the broker expects it to nudge lower to 206bps in 2H on drags from lower cash rates.

The broker notes banks typically outperform on rate cuts but this cycle looks very different with already benign bad debts and healthy volumes. Rate cuts (when they come to pass) may drive sector rotation out of banks, the analyst believes.

Given the limited margin of safety, Jarden cuts its rating to Sell from Underweight. The broker lifted FY25 EPS by 1% and lowered FY26 by -1%.

Target price $110.

COCHLEAR LIMITED ((COH)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0

Cochlear missed 1H services sales by -14% despite Wilsons’ forecasts already factoring in weaker services growth for FY25.

The broker reckons two consecutive services misses suggests the market may have misjudged growth following the first spectacular 18 months of the N8 processor product cycle.

The company’s 1H25 net profit and revenue missed also Wilsons’ forecast, by -3%. Management reiterated FY25 underlying net profit guidance but with expectations to the low end of guidance, which signals a miss to Wilsons’ forecast.

The broker cut FY25-26 EPS forecast by -2%. Target price lowered to $280 and rating downgraded to Market Weight from Overweight.

DOMAIN HOLDINGS AUSTRALIA LIMITED ((DHG)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Domain Holdings Australia’s 1H25 EBITDA was 2% ahead of Jarden’s estimate due to lower operating costs and the company narrowed its FY25 cost guidance range to the lower end of its previous range.

Looking forward, the broker notes listing volumes are the key variable in 2H25 and estimates a conservative -2.5% decline. This has resulted in a 1% upgrade to its FY25 EBITDA estimate, which the analyst reckons is potentially conservative.

On Greg Ellis’ announcement as interim CEO, the broker expects the transition to be smooth and understands he will be actively making strategic decisions.

The broker has lifted FY25 EPS estimate by 11.5% and FY26 by around 8% mostly due to lower D&A. Rating downgraded to Overweight from Buy. Target is $3.30.

EVOLUTION MINING LIMITED ((EVN)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0

Canaccord Genuity downgrades Evolution Mining to Hold from Buy with an unchanged target of $6.15 post 1H25 results, which were better than expected and ahead of consensus due to lower-than-forecast costs.

The 7c fully franked dividend per share compared to the broker’s forecast of 4c and 5c for consensus.

Management confirmed it is on track for FY25 production guidance of 710-780koz p.a., with a softer March quarter expected due to maintenance at Cowal.

Achieving a gearing target of around 15% by December 2025 would provide better capital management options, the analyst explains, with expected excess capital potential in FY26.

Hold. Target $6.15.

HUB24 LIMITED ((HUB)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0

Wilsons is pleased its call since August for Hub24’s valuation discount to close with Netwealth Group ((NWL)) has finally come to pass. However, the broker has now “reluctantly” downgraded the stock to Market Weight from Overweight on valuation grounds.

The company’s 1H25 result was healthy, the broker notes, but its forecast upgrades were limited due to sustained reduction in Pooled Cash balance as Hub24 enters 2H, increased headcount and higher tax rates.

Target price rises to $82 from $80.

IMDEX LIMITED ((IMD)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Imdex reported 1H25 underlying EBITDA of $64m which was largely in line with consensus. Jarden is forecasting 2H25 EBITDA of $68m mainly due to forex benefits, as the company flagged flat activity into 2H.

The broker reckons further benefits from cost-out or operating leverage could emerge through 2H25, should activity return earlier than current management expectations of FY26.

The broker cut FY25 and FY26 EPS by -4% and -3% respectively. Target price rises to $2.45 from $2.30.

Rating downgraded to Neutral from Overweight until the broker sees evidence of stronger activity and earnings leverage in FY26. 

MONADELPHOUS GROUP LIMITED ((MND)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Monadelphous Group’s 1H25 core net profit of $43m was ahead of Jarden’s $36m estimate on strong improvement in group EBITDA margins.

Excluding insurance and forex impact, EBITDA margins still grew strongly, up 75bps year on year, Jarden suggests.

The broker has lifted long-run EBITDA margins estimate closer to 7% by FY27. The analyst raised FY25 EPS forecast by 3.8% and FY26 by 4.8%.

Target price rises to $16.1 from $13.5. Rating downgraded to Neutral from Overweight following share price rise.

ORORA LIMITED ((ORA)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Jarden misinterpreted Orora’s guidance at the 1H25 result alluding to a “mid-30’s” EBIT ambition longer term for its glass manufacturing segment, as representing a half-year EBIT contribution. This meant the broker essentially doubled the stated ambition in its forward forecasts

The broker has now unwound this overestimate over FY26-27, resulting in a downgrade to its recently revised core EPS forecasts.

Target price cut to $2.4 from $2.6, and rating downgraded to Overweight from Buy.

PRO MEDICUS LIMITED ((PME)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0

Pro Medicus’ 1H25 topline revenue of $97M missed Wilsons’ estimate by -7% but the broker admits it was a case of its forecast being too high. Overall, directionally the result met the broker’s expectations.

The broker lowered FY25 revenue estimates on account of the 1H miss while leaving 2H forecasts unchanged. FY26 forecast was lifted by 1.2% owing mainly to new contracts.

Target price rises to $297 from $275 but rating lowered to Market Weight from Overweight.

Price Target Changes (Post Thursday Last Week)

More Highlights

BOL    BOOM LOGISTICS LIMITED

Overnight Price: $1.40

Taylor Collison rates ((BOL)) as Initiation of coverage with Outperform (2)

Taylor Collision initiated coverage on Boom Logistics with an Outperform rating but no target price.

The broker notes Boom has struggled historically with subpar Return on Net Assets (RoNA) and limited profitability on over $200m revenue.

The company’s performance materially improved since new leadership took over in 2H23.

With FY25 net profit guidance of $8m, up 21% on FY24, and a medium-term RoNA target of 15%, the stock remains undervalued at a -42% discount to peers, the broker observes.

The analyst highlights Australia’s transition to renewable energy and electrification is driving demand for crane services in wind farms and transmission line construction, and both are key growth areas for Boom.

This report was published on February 12, 2025.

Current Price is $1.40. Target price not assessed.
The company’s fiscal year ends in June.

Forecast for FY25:

Taylor Collison forecasts a full year FY25 dividend of 0.00 cents and EPS of 19.40 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.22.

Forecast for FY26:

Taylor Collison forecasts a full year FY26 dividend of 0.00 cents and EPS of 24.10 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 5.81.

All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

IFM    INFOMEDIA LIMITED

Automobiles & Components Overnight Price: $1.49

Moelis rates ((IFM)) as Buy (1)

Infomedia provided an update on its strategy to create alignment between its products, integrate its platforms with other key automotive software systems, pursue efficiencies and explore new growth opportunities. 

The 1H25 result displayed progress on efficiencies, Moelis notes, which has lead to cost control, disciplined capitalisation of development expenditure and high cash generation.

The company announced it will aim to undertake an on market share buyback of up to 18.8m shares. This is a significant capital management initiative, Moelis suggests.

The broker has not included the proposed acquisition of Tellegam nor buyback at this stage. Buy and $1.83 target retained.

This report was published on February 18, 2025.

Target price is $1.83 Current Price is $1.49 Difference: $0.345
If IFM meets the Moelis target it will return approximately 23% (excluding dividends, fees and charges).
Current consensus price target is $1.87, suggesting upside of 28.7%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 4.10 cents and EPS of 6.30 cents.
At the last closing share price the estimated dividend yield is 2.76%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 23.57.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 5.4, implying annual growth of 59.8%.
Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 3.2%.
Current consensus EPS estimate suggests the PER is 26.9.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 4.60 cents and EPS of 7.10 cents.
At the last closing share price the estimated dividend yield is 3.10%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 20.92.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 6.9, implying annual growth of 27.8%.
Current consensus DPS estimate is 5.0, implying a prospective dividend yield of 3.4%.
Current consensus EPS estimate suggests the PER is 21.0.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

SPZ    SMART PARKING LIMITED

Hardware & Equipment Overnight Price: $0.97

Petra Capital rates ((SPZ)) as Buy (1)

Petra Capital notes Smart Parking’s 1H25 result was broadly in line with strong operational performances from New Zealand and better than expected progress from operations in Germany and Denmark.

The company announced the acquisition of Peak Parking domiciled in Austin, Texas which is expected to add US$4.5m EBITDA on a calender 2025 basis.

Petra likes the deal, particularly the approach management has taken to de-risk the entry into a large market.

The broker lifts FY25-26 EPS forecasts by 13% and 21% respectively. Target price rises to $1.63 from $1.03, and Buy maintained.

This report was published on February 18, 2025.

Target price is $1.63 Current Price is $0.97 Difference: $0.66
If SPZ meets the Petra Capital target it will return approximately 68% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 2.50 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 38.80.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 4.60 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 21.09.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

IMB    INTELLIGENT MONITORING GROUP LIMITED

Overnight Price: $0.53

Moelis rates ((IMB)) as Buy (1)

Intelligent Monitoring Group announced it is acquiring Kobe Pty Ltd for an initial -$6.98m cash payment and a deferred -$1.92m. 

The company notes the acquisition will strengthen ADT’s ability to grow and diversify in Queensland and position it for scalable growth, and contribute $0.8m earnings to FY25 EBITDA and $2.5m annually.

Moelis has updated estimates to include Kobe which increased FY25 EPS estimate by 1c.

The broker expects the company to benefit from the group’s existing tax losses, and therefore operating earnings are expected to largely drop through to net profit over the next two years.

Target price rises to 91c from 88c. Buy maintained.

This report was published on February 17, 2025.

Target price is $0.91 Current Price is $0.53 Difference: $0.385
If IMB meets the Moelis target it will return approximately 73% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Moelis forecasts a full year FY25 dividend of 0.00 cents and EPS of 1.80 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 29.17.

Forecast for FY26:

Moelis forecasts a full year FY26 dividend of 0.00 cents and EPS of 7.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 7.29.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

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