In Case You Missed It – BC Extra Upgrades & Downgrades – 28-03-25

This story features CLEANAWAY WASTE MANAGEMENT LIMITED, and other companies. For more info SHARE ANALYSIS: CWY

The company is included in ASX100, ASX200, ASX300 and ALL-ORDS

Broker Rating Changes (Post Thursday Last Week)

Upgrade

CLEANAWAY WASTE MANAGEMENT LIMITED ((CWY)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0

Cleanaway Waste Management is debt-funding its proposed acquisition of Contract Resources Group for -$377m and expects the deal to be accretive on a pre and post-synergies basis. 

Jarden is surprised the company is investing in the lowest margin segment but believes investors will like the deal.

The broker expects the proposed purchase (subject to ACCC approval) to improve the earnings outlook beyond FY26. For now, though, it is not incorporating this deal and the Citywide acquisition in forecasts.

The analyst made modest changes to the FY25-27 core EPS forecasts and raised the target price to $3.10 from $3.05. Rating upgraded to Buy from Overweight following recent share price weakness.

FORTESCUE LIMITED ((FMG)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0

Jarden conducted a deeper analysis of iron ore outlook and P58 discount to the benchmark P62, noting a widening discount of -30% would lead to a significant reduction in Fortescue EPS estimates.

A narrower discount of -5% is a less likely scenario but would push up EPS significantly. The broker has assumed a -14% discount in its forecasts and a US$76/t long-term price for P62.

The analyst adjusted Mindy South and Nyidinghu mine sequencing assumptions, leading to a cut in target price to $16.91 from $17.08.

Rating upgraded to Neutral from Underweight on valuation grounds.

JAMES HARDIE INDUSTRIES PLC ((JHX)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden’s initial view about James Hardie Industries’ Azek acquisition announcement is the deal is strategically and operationally sensible. Also, the broker notes the announcement removes the M&A overhang since August last year.

The broker also finds reassurance from the company reaffirming it will complete the US$500m buyback once the deal is completed.

The analyst acknowledges the deal multiple is a concern and awaits further details, but for now suggests value has emerged from share price fall.

Target price cut to $45 from $53.50. Rating upgraded to Overweight from Neutral.

NANOSONICS LIMITED ((NAN)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0

Canaccord Genuity notes Nanosonics received de novo approval from the US FDA for the Coris system earlier than expected. This puts it in a good position to meet the initial launch timeline of 1Q26 and 70% of the total scope by volumes target within 12 months of approval.

The de novo approval will also help the company secure the 510K approval. No changes to forecasts.

Target price lifted to $5.74 from $4.47. The broker estimates the stock has an upside potential to $7.50 in a more bullish longer-term market share assumption scenario.

Rating upgraded to Buy from Hold.

NATIONAL STORAGE REIT ((NSR)) Upgrade to Buy from Hold by Moelis.B/H/S: 0/0/0

Moelis upgrades National Storage REIT to Buy from Hold and now prefers this storage REIT compared with Abacus Storage King ((ASK)).

The broker believes capital will continue to chase the storage sector because of a growing population, densification, lifestyle purchases etc. The sector too has performed well with the REIT’s cap rate moving just 3bps since June 2022.

The broker reckons there is little downside risk in the REIT, given it is trading at a wide -16.7% discount to net tangible asset

Target price unchanged at $2.37.

Downgrade

AMPLITUDE ENERGY LIMITED ((AEL)) Downgrade to Market Weight from Overweight by Wilsons.B/H/S: 0/0/0

Wilsons is pleased with Amplitude Energy’s 50:50 JV deal with O.G. Energy to progress the East Coast Supply Project after it purchases Mitsui’s 50% interest in the project.

The broker believes the deal offers a clear visibility of the work program. The broker has factored in -$260m phase 1 capex and -$180m phase 2 capex, and increased debt borrowing by $200m in FY27 in its forecasts.

Rating downgraded to Market Weight from Overweight. Target price is 24c.

CAPRICORN METALS LIMITED ((CMM)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0

Capricorn Metals closed its gold hedge book and purchased put options, funding it with $7m cash and a share issue at a -6% discount to the hedge and debt financier Macquarie Bank ((MQG)).

Canaccord Genuity believes it was a prudent decision and leaves the company with cash/bullion balance of $356m to develop its projects.

The broker updated its model to reflect the hedge closure, put options, and share issuance. Target price dropped to $8.70 from $8.85.

Rating downgraded to Hold from Buy on valuation grounds. 

SYNLAIT MILK LIMITED ((SM1)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0

Synlait Milk’s 1H25 EBITDA came at the top end of the guidance, and net profit was NZ$4.8m vs -NZ$96m loss for the year before. 

Jarden notes the improved result was due to higher demand for advanced nutrition, improved ingredients stream returns and forex benefits.

The broker raised its FY25 EBITDA forecast by 59% to NZ$98m and FY26 by 26% to NZ$103m. The broker also cut the risk premium to the cost of equity to 3.5% from 5.0% on lower debt.

Target price rises to NZ68c from NZ45c. Rating downgraded to Underweight from Neutral on strong share price gains.

Price Target Changes (Post Thursday Last Week)

More Highlights

AAR    ASTRAL RESOURCES NL

Gold & Silver Overnight Price: $0.15 

Petra Capital rates ((AAR)) as Initiation of coverage with Buy (1)

Petra Capital has initiated coverage of Astral Resources with a Buy rating and target price of 29c.

The broker notes the September 2023 scoping study for the Mandilla Gold Project showed mine inventory of 883koz, delivering a net present value (discount rate 8%) of $442m at $2,750/oz gold price.

This will nearly double to $876m as the broker forecasts a 50% lift in mine inventory ahead of the pre-feasibility study in the June quarter to 1.3Moz and $3,300/oz gold price.

The broker believes the acquisition of Maximus Resources ((MXR)) will expand the company’s regional footprint as its flagship Spargoville project borders the Mandilla project.

This report was published on March 19, 2025.

Target price is $0.29 Current Price is $0.15 Difference: $0.135
If AAR meets the Petra Capital target it will return approximately 87% (excluding dividends, fees and charges).

ARU    ARAFURA RARE EARTHS LIMITED

Rare Earth Minerals Overnight Price: $0.19 

Canaccord Genuity rates ((ARU)) as Speculative Buy (1)

Arafura Rare Earths signed a binding offtake deal for Ndpr oxide with Traxys Europe which takes the total offtake deals signed so far to 2,320tpa.

Based on ongoing negotiations, Canaccord Genuity notes the company will reach the 80% coverage target required for the final investment decision.

On the funding side, the broker notes the remaining equity gap is around -$1.2bn for which the company might target strategic investors.

Target price is 30c and rating retained at Speculative Buy.

This report was published on March 19, 2025.

Target price is $0.30 Current Price is $0.19 Difference: $0.11
If ARU meets the Canaccord Genuity target it will return approximately 58% (excluding dividends, fees and charges).

FMG    FORTESCUE LIMITED

Iron Ore Overnight Price: $15.79 

Jarden rates ((FMG)) as Upgrade to Neutral from Underweight (3)

Jarden conducted a deeper analysis of iron ore outlook and P58 discount to the benchmark P62, noting a widening discount of -30% would lead to a significant reduction in Fortescue EPS estimates.

A narrower discount of -5% is a less likely scenario but would push up EPS significantly. The broker has assumed a -14% discount in its forecasts and a US$76/t long-term price for P62.

The analyst adjusted Mindy South and Nyidinghu mine sequencing assumptions, leading to a cut in target price to $16.91 from $17.08.

Rating upgraded to Neutral from Underweight on valuation grounds.

This report was published on March 19, 2025.

Target price is $16.91 Current Price is $15.79 Difference: $1.12
If FMG meets the Jarden target it will return approximately 7% (excluding dividends, fees and charges).
Current consensus price target is $18.16, suggesting upside of 15.0%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 122.00 cents and EPS of 178.00 cents.
At the last closing share price the estimated dividend yield is 7.73%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.87.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 171.1, implying annual growth of N/A.
Current consensus DPS estimate is 95.0, implying a prospective dividend yield of 6.0%.
Current consensus EPS estimate suggests the PER is 9.2.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 80.00 cents and EPS of 135.00 cents.
At the last closing share price the estimated dividend yield is 5.07%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 11.70.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 156.4, implying annual growth of -8.6%.
Current consensus DPS estimate is 81.0, implying a prospective dividend yield of 5.1%.
Current consensus EPS estimate suggests the PER is 10.1.

Copper Overnight Price: $0.04 

LOTUS RESOURCES LIMITED

Uranium Overnight Price: $0.18 

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

Lotus Resources announced an additional offtake deal of 600klbs over 2026-29 from its Kayelekera uranium mine which Petra Capital considers an achievement, given the project is not in the production stage.

The company also published an updated scoping study for the Letlhakane project which showed marginal changes to economic parameters, leading the broker to keep its modelling intact.

The broker remains of the view the uranium price is unlikely to follow the spot price lower, using the latest offtake deal as supportive of its thesis the market is tight.

Target price 28c and Buy rating.

This report was published on March 24, 2025.

Target price is $0.28 Current Price is $0.18 Difference: $0.095
If LOT meets the Petra Capital target it will return approximately 51% (excluding dividends, fees and charges).
Current consensus price target is $0.45, suggesting upside of 143.2%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Petra Capital forecasts a full year FY25 EPS of minus 1.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is minus 18.50.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.7, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

Forecast for FY26:

Petra Capital forecasts a full year FY26 EPS of 2.20 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.41.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is -0.7, implying annual growth of N/A.
Current consensus DPS estimate is N/A, implying a prospective dividend yield of N/A.
Current consensus EPS estimate suggests the PER is N/A.

CDA    CODAN LIMITED

Hardware & Equipment Overnight Price: $16.11 

Goldman Sachs rates ((CDA)) as Buy (1)

Goldman Sachs notes its discussions with Motorola recently on the communication segment have positive implications for Codan.

The broker notes Motorola and Codan’s share prices have tracked closer in recent years as Codan shifted its exposure to the communications business.

The broker highlights the spending environment is positive for the command center as public safety remains a high priority.

Buy rating and $18 target price.

This report was published on March 21, 2025.

Target price is $18.00 Current Price is $16.11 Difference: $1.89
If CDA meets the Goldman Sachs target it will return approximately 12% (excluding dividends, fees and charges).
Current consensus price target is $17.58, suggesting upside of 9.1%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 28.00 cents and EPS of 55.12 cents.
At the last closing share price the estimated dividend yield is 1.74%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 29.23.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 53.5, implying annual growth of 19.0%.
Current consensus DPS estimate is 26.2, implying a prospective dividend yield of 1.6%.
Current consensus EPS estimate suggests the PER is 30.1.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 33.00 cents and EPS of 66.87 cents.
At the last closing share price the estimated dividend yield is 2.05%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 24.09.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 65.8, implying annual growth of 23.0%.
Current consensus DPS estimate is 31.7, implying a prospective dividend yield of 2.0%.
Current consensus EPS estimate suggests the PER is 24.5.

AHX    APIAM ANIMAL HEALTH LIMITED

Healthcare services Overnight Price: $0.38 

Canaccord Genuity rates ((AHX)) as Initiation of coverage with Buy (1)

Canaccord Genuity initiated coverage of Apiam Animal Health with a Buy rating and target price of 63c.

The broker notes more than 60% of the company’s revenue comes from companion and mixed animal veterinary clinics where demand is expected to rise once again after the post-Covid slowing.

A key source of demand is expected to come from pets bought during the Covid era that will enter mid-life in 2025-26.

The company recently acquired four clinics which is expected to settle in 4Q25, and the broker is forecasting an FY25 leverage ratio of 2.8x after this settlement.

The broker forecasts 5.4% revenue growth in FY26 and EBITDA growth of 8.7% based on an industry growth of 4.2%. For FY27, the broker forecasts 7.8% EBITDA growth on a 3.8% industry growth estimate.

This report was published on March 21, 2025.

Target price is $0.63 Current Price is $0.38 Difference: $0.255
If AHX meets the Canaccord Genuity target it will return approximately 68% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 2.00 cents and EPS of 3.00 cents.
At the last closing share price the estimated dividend yield is 5.33%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 12.50.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 2.00 cents and EPS of 4.00 cents.
At the last closing share price the estimated dividend yield is 5.33%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 9.38

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