Weekly Reports | Mar 10 2025
Weekly update on stockbroker recommendation, target price, and earnings forecast changes.
By Mark Woodruff
Guide:
The FNArena database tabulates the views of eight major Australian and international stockbrokers: Citi, Bell Potter, Macquarie, Morgan Stanley, Morgans, Ord Minnett, Shaw and Partners and UBS.
For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.
Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.
Summary
Period: Monday March 3 to Friday March 7, 2025
Total Upgrades: 9
Total Downgrades: 7
Net Ratings Breakdown: Buy 60.00%; Hold 32.92%; Sell 7.08%
For the final week of the reporting season ended Friday, March 7, 2025, FNArena tracked nine upgrades and seven downgrades for ASX-listed companies from brokers monitored daily.
Rises and falls in analysts' average earnings forecasts and target prices were broadly equal as can be seen in the tables below.
All material changes in these tables were triggered by reporting season results, also covered in FNArena's Corporate Results Monitor, which summarises all the misses and beats as well as outlooks for companies at https://fnarena.com/index.php/reporting_season/
Standout rises in average targets for Generation Development Group and Life360 matched earnings beats listed in the Monitor, while the largest percentage fall in average target for IDP Education can be traced back to the company's interim result disappointing ('miss').
On the other hand, Tyro Payments received the second largest fall in target but results were mostly in line, according to the Monitor, with management maintaining FY25 guidance.
Life360 also appeared second on the earnings upgrade table behind Bubs Australia. The latter's interim result was broadly in line with brokers' expectations and the large percentage increase in average earnings resulted from the very small forecast numbers involved.
While appearing fourth on the earnings upgrade list, TPG Telecom's FY24 result slightly missed expectations, with the key disappointment for analysts being a fall in postpaid mobile subscriber numbers.
Brokers remain cautious on TPG, yet a new regional expansion deal could double cash flow in 2025, according to management.
A more comprehensive analysis of the TPG result and outlook is available at https://fnarena.com/index.php/2025/03/06/tpg-telecom-pins-hopes-on-2025/
Turning to falls in average earnings forecasts, here most listed in the table below corresponded to earnings disappointments in February, apart from an in-line interim result from second-placed Bellevue Gold.
Separately, Bellevue's average earnings forecast benefited last week from a post results season review by Ord Minnett of stocks under coverage in the Mining sector, which included increased forecasts for gold and silver prices.
Focusing on gold mining at its Bellevue Gold Project in Western Australia, Bellevue was most impacted by Ord Minnett's increase in gold price forecast across 2025 to 2029 to US$2,900/oz from US$2,700/oz, and the increase in the long-term price forecast to US$2,500/oz from US$2,300/oz.
As a result of these changes, the broker's EPS forecasts for Bellevue Gold increased across 2025-27 by 11.8%, 18.4%, and 20.3%, respectively.
Arcadium Lithium's average earnings forecast fell by -17% after Citi revised its forecasts, though its fourth quarter net loss is largely irrelevant given the company was recently acquired by Rio Tinto.
Following a first-half revenue miss against the consensus expectation, SiteMinder suffered a -16% fall in average earnings forecast from brokers last week.
As explained further at https://fnarena.com/index.php/2025/03/06/is-siteminders-re-rating-just-a-matter-of-time/, analysts still anticipate a boost from new products and maintain faith in the company's longer-term strategy.
Total Buy ratings in the database comprise 60.00% of the total, versus 32.92% on Neutral/Hold, while Sell ratings account for the remaining 7.08%.
Upgrade
AUSTRALIAN FINANCE GROUP LIMITED ((AFG)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 2/0/0
Australian Finance Group reported 1H25 cash EPS which declined -6%, and missed Macquarie's forecasts by -11%, due to higher operating expenses and a -73% drop in Thinktank earnings.
Residential lodgements rose 26% year-on-year in January, with AFG Securities settlements up 31%, offsetting a -7% decline in AFG Home Loan lodgements, the broker details.
AFG's loan book grew 23% to $5.1bn, with net interest margin improving.
The analyst upgrades the rating to Outperform from Neutral, citing positive earnings momentum and stabilising margins.
Target price increases -2.4% to $1.68, with valuation supported by circa 7% dividend yield and an attractive valuation.
BELLEVUE GOLD LIMITED ((BGL)) Upgrade to Hold from Lighten by Ord Minnett .B/H/S: 3/1/0
Bellevue Gold's operational challenges in 2024 appear resolved, prompting Ord Minnett to upgrade its rating to hold from lighten and raise the target price to $1.20 from $1.15.
The broker notes improved underground development since September, following new ventilation installations, suggesting stronger production from the March quarter onwards.
Ore grades in January indicated an exceptional 5.0g/t, though confirmation is needed over the next two quarters before revising model assumptions.
Bellevue has the ability to produce over 200,000oz annually at an all-in-sustaining-cost of $2,000/oz, generating $350m in cash flow at a $4,500/oz gold price.
Ord Minnett raises EPS forecasts by 0.7% for FY25 and 0.2% for FY26-27.
COCHLEAR LIMITED ((COH)) Upgrade to Buy from Neutral by Citi .B/H/S: 1/4/0
Citi raises its target for Cochlear to $300 from $290 and upgrades to Buy from Neutral following a -14% decline in share price following the 1H results miss and guidance downgrade.
While acknowledging uncertainty pending the launch of new devices by mid-2025, the broker raises its outer-year EPS estimates by 1-2% on a higher margin outlook, keeping FY25-26 unchanged.
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