Weekly Reports | Mar 07 2025
Broker Rating Changes (Post Thursday Last Week)
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AUSSIE BROADBAND LIMITED ((ABB)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
Following Aussie Broadband's 1H25 results, Wilsons believes the balance of risks is genuinely to the upside, and has upgraded the rating to Overweight from Market Weight.
Revenue grew 7% y/y to $589m due to mid-teens growth across three of the company's core segments and was in line with the broker's forecast but above consensus.
The company upgraded FY25 EBITDA guidance to $133-138m from $125-135m, with Wilsons positioned at the midpoint at $135m.
The broker observes the company's 2H-to-date net broadband connections were 14,129 which is 36% of forecast 2H total net additions of 39.7k.
Target price lifts to $5.08 from $3.62.
ADAIRS LIMITED ((ADH)) Overweight by Jarden.B/H/S: 0/0/0
Moelis notes Adairs' 1H25 revenue was broadly in line with consensus but within that Mocka beat forecasts, Adairs was in line and FoF missed due to weaker Victoria consumers.
Gross profit margin of 47.9% was lower than the 49% consensus.
Trading update for the first seven weeks of 2H showed group sales were up 9.2% y/y vs weak comps of -9.6%, with Adairs' revenue growth running ahead of consensus.
The broker lowered revenue forecasts and downgraded profit margins, but also lowered cost of doing business forecasts on benefits from Mocka investment earlier and reduction in inefficiencies at Adairs.
Overweight rating and target price is $2.59.
CATALYST METALS LIMITED ((CYL)) Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity found the first half result from Catalyst Metals "clean" with revenue broadly in line and EBITDA slightly ahead. No dividend was declared with surplus cash to be used to fund growth and exploration.
The broker is increasingly confident in the company's ability to deliver on its three-year outlook and increases FY26-27 production forecasts by around 4%. Target is raised to $ 5.00 from $4.25 and the rating is upgraded to Buy from Speculative Buy.
GENERATION DEVELOPMENT GROUP LIMITED ((GDG)) Upgrade to Buy from Hold by Petra Capital.B/H/S: 0/0/0
Generation Development's half year result exceeded expectations, with strong revenue and (earnings) EBITDA growth in the Lonsec division, Petra Capital notes.
Revenue rose 23% and underlying net profit after tax advanced 50% to $12.4m. Genlife's revenue margin improved, with bonds written trending significantly higher on an annualised basis.
Active independent financial advisers transacting with Genlife increased 16% year-on-year, and new investment bonds grew 42%.
Lonsec's eanrings margin expanded to 42% from 38%, driven by higher LIS margins and stronger research division performance, the broker explains.
Petra Capital expects a higher dividend payout ratio from FY26, supported by the retirement of Lonsec debt and the achievement of earnout targets.
Target price rises $5.58 from $5.18, with a rating upgraded to Buy from Hold.
INTEGRAL DIAGNOSTICS LIMITED ((IDX)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
In its first results since acquiring Capitol Health, Integral Diagnostics posted an operating EBITDA margin that missed estimates.
Canaccord Genuity believes the resulting sell-off was unwarranted, particularly as there is a path to margin improvement on the acquisition.
There is also the prospect of -$10m in synergies most of which will be recognised in the first year, with the potential for longer term synergies not taken into account.
The broker raises its target to $2.90 from $2.50 and upgrades to Buy from Hold.
NIB HOLDINGS LIMITED ((NHF)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden raises its target for nib Holdings to $7.00 from $6.70 and upgrades to Overweight from Neutral, assessing lower downside risks following a "solid" underlying 1H result.
The broker highlights a consensus-beating performance in the Australian Resident Health Insurance (ARHI) segment. Profit was in line with consensus due to one-off costs related to a productivity program and M&A integration.
Also, the combination of an ARHI margin recovery and easing inflationary pressures in the hospital book offers increased confidence in management's ability to meet long-term margin targets, suggest the analysts.
PROPEL FUNERAL PARTNERS LIMITED ((PFP)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0
Moelis notes Propel Funeral Partners' 1H25 revenue and EBITDA missed its forecast but remains more positive on the outlook.
The company retains a funding capacity of $144m. The broker believes, as organic volumes continue to be positive and funding capacity is deployed, top-line growth and modest operating leverage will drive EPS growth.
The broker highlights 2H of the calendar year 2024 death registration data in NSW, VIC, QLD showed 4.8% growth y/y, boosting confidence in the company returning to 2% potential growth from 2H25.
Target price cut to $6.1 from $6.2, and rating upgraded to Buy from Hold
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