Weekly Reports | 11:15 AM
Broker Rating Changes (Post Thursday Last Week)
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CORE LITHIUM LIMITED ((CXO)) Upgrade to Neutral from Sell by Jarden.B/H/S: 0/0/0
Core Lithium's updated restart study for the Finniss lithium project contained a pre-feasibility study and focused on a conceptual underground mine plan.
Jarden notes the study showed a halving in mining unit costs to $63-73/t from $120/t in last year's update. It also showed a significantly lower pre-development capex of -$170-200m from -$282m estimated before.
The challenge for the company, in the broker's view, is to secure funding, and non-dilutive funding would be an upside risk.
Rating upgraded to Neutral from Sell. Target lifted to 10c from 7c.
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EAGERS AUTOMOTIVE LIMITED ((APE)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0
After reassessing Eagers Automotive's forecasts for FY25, Canaccord Genuity has concluded factors such as April holiday timings and Federal election in 1H25 mean earnings skew to 2H is likely.
No change to FY25 net profit forecast of $400.5m, but the broker now sees $182.4m in 1H and the remaining in 2H.
The broker believes bolt-on acquisitions will continue to be the company's strategy, but at some point, it will need to boost the balance sheet.
Rating downgraded to Hold from Buy. Target lifted to $17.20 from $17.00 on valuation roll-forward.
AVITA MEDICAL INC ((AVH)) Downgrade to Underweight from Market Weight by Wilsons.B/H/S: 0/0/0
Avita Medical's 1Q25 revenue missed Wilsons' forecast by -21%, and while the company reiterated FY25 guidance of US$100-106m, the broker isn't as optimistic and is forecasting US$92.2m.
The company announced a reduction in field sales team headcount to 82 from 108 to cut costs, but the broker isn't warming up to the strategy to redeploy them in sales from the service-based model.
The key question is whether the 2Q25 12-month revenue covenant target of US$78m will be met. The broker's US$79.4m forecast suggests it will, but it comes with a caution the venture debt lender may be less tolerant of another covenant miss.
Rating downgraded to Underweight from Market Weight. Target cut to $1.92 from $3.20.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | CORE LITHIUM LIMITED | Neutral | Sell | Jarden | |
| Downgrade | |||||
| 2 | AVITA MEDICAL INC | Sell | Neutral | Wilsons | |
| 3 | EAGERS AUTOMOTIVE LIMITED | Neutral | Buy | Canaccord Genuity | |
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