Weekly Reports | 11:15 AM
Broker Rating Changes (Post Thursday Last Week)
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ARISTOCRAT LEISURE LIMITED ((ALL)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden upgrades its rating for Aristocrat Leisure to Overweight from Neutral following recent share price underperformance. The target remains at $68.
The broker highlights strong recurring revenues, robust free cash flow reinvestment, ongoing market share gains, and growth in direct-to-consumer digital sales as key positives. A resilient performance is expected even in a weaker US consumer environment.
Risks include a US economic slowdown, gaming market volatility, executive turnover, and the potential for expensive or poorly integrated M&A, with Jarden expecting the $750m buy-back to support the share price if no major acquisitions eventuate.
AMP LIMITED ((AMP)) Upgrade to Buy from Neutral by Goldman Sachs.B/H/S: 0/0/0
Goldman Sachs notes AMP's 1Q25 update pointed to a stable flows trend, with Platform net flow of $250m in line with the $200-300m seen in recent quarters.
Net outflows in Superannuation & Investments improved to -$108m vs -$371m in 1Q24, with AMP stating it is taking steps to improving retention. Loan growth at AMP Bank was weak, but there's more focus on maintaining margin over volume.
Upgrade to Buy from Neutral. Target $1.48.
GENTRACK GROUP LIMITED ((GTK)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
Wilsons upgrades Gentrack Group to Overweight from Market Weight, highlighting new hiring activity and momentum at Veovo, along with a potential major contract win in Bulgaria.
The analyst observes increased headcount and project scoping for Bulgarias largest energy supplier, suggesting supportive growth into the second half of FY25, with catalysts also including possible Tier 1 utility contracts and UK business-to-consumer water sector wins.
Wilsons' earnings forecasts for FY25 remain unchanged, though the second half earnings skew is increased given continued re-investment in staffing.
Target price slips to $12.10 from $12.50, reflecting a lower valuation multiple offset partly by New Zealand dollar depreciation.
SOUTH32 LIMITED ((S32)) Upgrade to Hold from Sell by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity upgrades South32 to Hold from Sell after the March quarter update, noting alumina and aluminium production met expectations while manganese, silver and copper were weaker.
The analyst highlights a -10% downgrade to Cannington production guidance due to geotechnical issues, along with higher cost expectations at US$195/t ore processed.
Despite industrial metal price weakness and Hermosa capital cost concerns, valuation metrics have improved with South32s earnings before interest, tax, depreciation and amortisation multiple now 45 times, implying limited downside.
Canaccord Genuity's FY25 earnings forecasts are raised by 9% on lower group costs, while FY26 is lowered by -3% on weaker copper revenues. Target price remains unchanged at $2.60.
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