Weekly Reports | Mar 14 2025
Broker Rating Changes (Post Thursday Last Week)
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BRICKWORKS LIMITED ((BKW)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Ahead of 1H25 result, Brickworks released an earnings update expecting a -13% y/y fall in North American revenues that compared with Jarden's forecast for a -8% decline. The company also flagged a significant fall in North America's EBITDA margin.
For the Australian business, the broker expects 1H to be a trough for building products, with residential construction looking poised for a rebound.
The broker cut EPS estimates by an average -6%, with lower US building product profits largely offsetting an improved Australian business.
Target price falls to $25.60 from $29.10. Rating upgraded to Overweight from Neutral on valuation grounds.
FLEETPARTNERS GROUP LIMITED ((FPR)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity explains it is not upgrading FleetPartners Group to Buy from Hold because of higher earnings growth ahead.
One of the issues that has made the broker cautious previously has been a period where earnings have generated the equivalent of super profits, courtesy of a post-covid boom.
The upgrade is based on the fact this is a well-run company with relatively defensive and predictable earnings and one the largest fleet managers in a rational market that could experience further consolidation.
Canaccord Genuity believes the stock has become too cheap to ignore and maintains an unchanged target at $3.40.
HMC CAPITAL LIMITED ((HMC)) Upgrade to Overweight from Underweight by Jarden.B/H/S: 0/0/0
Jarden upgraded the rating on HMC Capital to Overweight from Underweight following the significant share price fall over the last three months.
The broker acknowledges ongoing challenges remain with its listed funds - HealthCo Healthcare & Wellness REIT ((HCW)) and Digico Infrastructure Reit Stapled Unit ((DGT)) but the price decline is still overdone.
The broker cut the target price to $8.65 from $9.95 to account for the risks in the uncertain macro environment but highlights a 17.5% upside risk if its 19% compounded growth for underlying EPS (FY25-28) comes to pass.
RELIANCE WORLDWIDE CORP. LIMITED ((RWC)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden upgrades its rating for Reliance Worldwide to Overweight from Neutral, following recent share price underperformance. The $5.60 target is unchanged.
In the broker's view, Reliance remains well-positioned with exposure to large, fragmented global markets, particularly in non-discretionary plumbing repair sectors, which provide significant growth opportunities.
Despite sluggish housing markets, the analysts note management's guidance for FY25 includes flat sales in the Americas and modest growth in the APAC region, with positive operating leverage expected in the medium term.
The company's margin resilience, strong product innovation, and strategic focus on core plumbing applications should support mid-to-high single-digit revenue growth and continued margin expansion, suggests Jarden.
SEEK LIMITED ((SEK)) Upgrade to Neutral from Sell by Goldman Sachs.B/H/S: 0/0/0
Goldman Sachs notes the Seek Employment Index rose 5.1% sequentially in January, marking the biggest jump since October 2021. While Seek had factored it in FY25 guidance, the broker reckons this could lead to a stronger volume trajectory in FY26.
The broker pushed the FY26 growth forecast by 1%, leading to a 3% rise in EBITDA estimate.
Target price rises to $25 from $24. Rating upgraded to Neutral from Sell following share price weakness.
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