Weekly Reports | Apr 07 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 31 to Friday April 4, 2025
Total Upgrades: 7
Total Downgrades: 8
Net Ratings Breakdown: Buy 61.60%; Hold 31.78%; Sell 6.62%
For the week ended Friday, April 4, 2025, FNArena tracked seven upgrades and eight downgrades for ASX-listed companies from brokers monitored daily.
Reductions in average target prices materially outpaced increases, and downward revisions to average earnings forecasts were far more significant than upgrades, as illustrated in the tables below.
Higher gold price forecasts by the commodity teams at Citi, Bell Potter, and Ord Minnett result in gold stocks filling the first seven places for target increases and six of the ten places on the positive change to earnings list.
Summarising the largest moves, average target prices rose by 8.6% for Regis Resources, 5.5% for Evolution Mining, 5.4% for Genesis Minerals, and 4.4% for Northern Star Resources. Average earnings forecasts for Genesis, Regis, Capricorn Metals and Evolution rose by 6.0%, 5.8%, 4.2% and 2.6%, respectively.
Bell Potter upgraded its gold price forecasts to reflect the greater levels of uncertainty in markets and trade policy since the inauguration of Donald Trump as US President.
Uncertainty is hurting capital investment, sentiment, and equity valuations, explained the analysts, driving a flight to safety and the unencumbered value preservation offered by gold bullion.
The broker's gold price forecast has increased by 7% in the first half of 2025 to US$2,890/oz, by 9.3% for the second half to US$2,950/oz, and by 12% in 2026 to US$2,800/oz.
While the traded price has breached the psychologically important US$3,000/oz level, settling at around US$3,039/oz in New York last Friday, Citi observed ASX-listed gold equities were discounting a US$2,250-2,500/oz gold price at the beginning of April.
This broker remains bullish on the yellow metal with a US$3,200/oz target over the next three-month period driven by buying as a hedge against US growth downside coupled with strong demand from China and Emerging Market central banks.
Forecasting an around US$3,600/oz gold price by the fourth quarter of 2025, the strategists adopt a more conservative base case of US$3,100/oz for the second quarter.
Citi's long-term price forecast is now US$2,200/oz (real), up from US$2,000/oz, driving higher 12-month target prices across the broker's research coverage of gold stocks.
Citi has a Buy rating for Newmont Corp, while outside the ASX100 Genesis Minerals (Buy) is the broker's preferred exposure.
Regarding two Neutral-rated stocks, the analysts expect the ongoing outperformance of Evolution Mining over Northern Star Resources can continue, as the latter's earnings upgrades are subdued by its hedge book, and the broker has more visibility on the outlook for Evolution's medium-term costs, capex, and production.
On the flipside, average FY25 earnings forecasts last week for uranium stocks Paladin Energy, Boss Energy, and for Pilbara Minerals and Mineral Resources fell by -36%, -30%, -22%, and -11%, respectively.
Paladin's average target declined by approximately -6%, driven by Bell Potter's -48% downgrade to its second-half production forecast. This revision reflects weaker output and grades following heavy rainfall in Namibia, which disrupted both ore mining and the processing of stockpiled material at the Langer Heinrich mine.
Production has been further impacted by ongoing stockpile grade issues, explained the analysts, who lowered their 12-month target to $6.30 from $11.00.
While operations have recommenced, Bell Potter noted the capacity utilisation rate was low due to high moisture content in the stockpiled ore creating materials handling issues in the plant.
Analyst at Macquarie toured Boss Energy's Honeymoon uranium project in South Australia last week and noted an ongoing strong operational performance.
While lowering its target, mainly due to first half results in February, this broker now expects management can beat FY25 guidance for 850klb of drummed U3O8 production and raises its forecast to 892klb.
Analysts at Ord Minnett still nominate Boss as their pick of the uranium sector, while Macquarie noted the uranium industry has generally had difficulty restarting idled uranium assets from the last cycle, but Boss is bucking the trend.
Overall, Ord Minnett anticipates both spot and term uranium prices will rise as contracting resumes at pace after utilities gain clarity following the recent tariff-related upheaval.
Due to persistent oversupply in the lithium market, Ord Minnett's 2025 spodumene forecast was cut by -9%, while the iron ore price forecast was reduced by -3%. Both Pilbara Minerals (lithium) and Mineral Resources (lithium and iron ore) suffered from the broker's commodity price review last week.
The only commodities spared a price forecast downgrade were gold and rare earths proxy neodymium-praseodymium (NdPr), which is recovering from a recent trough due to supply side issues.
Regarding Mineral Resources, Macquarie reduced its target by -10% to $35 after lowering FY25 and FY26 earnings forecasts by -100% and -44%, respectively (on already slim estimates), due to higher assumed costs at the Onslow Iron project in Western Australia and a rise in group depreciation and amortisation charges.
The broker also delayed its Onslow ramp-up forecast which resulted in EPS estimate cuts of between 14-48% across FY27-FY29.
Along with its downgraded earnings forecasts, Paladin Energy also appears third on the negative change to target price list, behind Global Lithium Resources and HMC Capital.
Ord Minnett lowered its target for Global Lithium to 20 cents from 26 cents as part of its commodity price review and upgraded to Accumulate from Hold.
For HMC Capital, Morgan Stanley lowered its target to $7.35 from $12.21 after adopting more conservative assumptions around growth in assets under management (AUM).
Around 75-80% of AUM (ex-credit) for HMC comes from the listed market, explained the analysts, and with sub-optimal performance across all three funds, the broker's confidence around winning additional AUM has softened.
Lower FY25 earnings forecasts by the broker also reflect the company's trading update showing pre-tax EPS is now tracking at 70cps, down from the 80cps articulated during the release of interim results in February.
Integrated grower, processor and marketer of almonds, Select Harvests, heads up the positive change to earnings table, with Bell Potter noting a favourable earnings backdrop and near-term upside bias to the broker's forecasts due to stronger-than-expected Australian dollar almond pricing.
Almond prices have firmed around 10% since the company's AGM on 18 February and the company has also been achieving premiums to pricing benchmarks.
While management has retained FY25 guidance of $9.20/kg, spot prices are currently between $10.60-10.90/kg, and year-to-date averages (at the company's currency hedge rate) are at approximately $9.60/kg, highlighted the analysts.
Total Buy ratings in the database comprise 61.60% of the total, versus 31.78% on Neutral/Hold, while Sell ratings account for the remaining 6.62%.
Upgrade
AMP LIMITED ((AMP)) Upgrade to Neutral from Sell by UBS .B/H/S: 1/4/0
UBS upgrades AMP to Neutral from Sell with a lower target price of $1.30 from $1.35, as the broker marks to market the wealth stocks for softer equity markets over the March quarter.
The risk-off tone has resulted in a sell-down of the sector and a valuation de-rating, which has improved the valuation appeal for AMP and Magellan Financial Group ((MFG)). AMP has sold off -29% since the February results.
Considerable uncertainty remains in the sector, and UBS prefers the "relative safety" of wealth exposures such as Perpetual ((PPT)), Insignia Financial ((IFL)), and GQG Partners ((GQG)) on valuation and growth prospects.
EMERALD RESOURCES NL ((EMR)) Upgrade to Lighten from Sell by Ord Minnett .B/H/S: 0/0/0
Ord Minnett has broadly reduced its commodity price forecasts, with the exception of gold and neodymium-praseodymium.
The broker cites growing concerns over weakening Chinese steel demand and the potential global trade and economic impacts stemming from proposed US tariffs.
The broker's 2025 iron ore price forecast falls by -3%, while metallurgical coal and thermal coal price estimates fall by -18% and -17%, respectively.
On a sector level, Ord Minnett prefers base metal producers over the bulk miners, noting limited appeal among the lithium and coal producers.
Rio Tinto is preferred over over BHP Group among the large diversified miners, while South32, Capstone Copper, and MAC Copper are the analyst's top picks for base metals exposure.
The broker upgrades its rating for Emerald Resources to Lighten from Sell and maintains a $3.60 target.
Among the large gold exposures, the analysts like Buy-rated Newmont Corp.
GLOBAL LITHIUM RESOURCES LIMITED ((GL1)) Upgrade to Accumulate from Hold by Ord Minnett .B/H/S: 2/0/1
Ord Minnett has broadly reduced its commodity price forecasts, with the exception of gold and neodymium-praseodymium.
The broker cites growing concerns over weakening Chinese steel demand and the potential global trade and economic impacts stemming from proposed US tariffs.
The broker's 2025 iron ore price forecast falls by -3%, while metallurgical coal and thermal coal price estimates fall by -18% and -17%, respectively.
On a sector level, Ord Minnett prefers base metal producers over the bulk miners, noting limited appeal among the lithium and coal producers.
Rio Tinto is preferred over over BHP Group among the large diversified miners, while South32, Capstone Copper, and MAC Copper are the analyst's top picks for base metals exposure.
The broker's 2025 spodumene forecast falls by -9% due to persistent oversupply in the lithium market.
For Global Lithium Resources, the broker lowers its target to 20c from 26c and upgrades to Accumulate from Hold.
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