Weekly Reports | May 30 2025
Broker Rating Changes (Post Thursday Last Week)
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BIG RIVER INDUSTRIES LIMITED ((BRI)) Upgrade to Speculative Buy from Hold by Taylor Collison.B/H/S: 0/0/0
Taylor Collison notes the outlook for Big River Industries' is improving, and the recent share price fall at the same time as rising dwelling approvals, has opened an attractive entry point for investors.
The broker has upgraded the company to Speculative Buy from Hold.
The analyst highlights the housing construction outlook has improved, and showroom foot traffic has increased. While the delay in policy rate cuts is a key risk, the analyst's base view is multi-year sustained demand rather than a one-off rebound.
No target price set.
DJERRIWARRH INVESTMENTS LIMITED ((DJW)) Upgrade to Outperform from Hold by Taylor Collison.B/H/S: 0/0/0
Taylor Collison notes Djerriwarrh Investments is now trading at a discount of -10.84% to pre-tax net tangible assets vs -6.69% in March. The equivalent Z-score is -1.06 vs -0.79.
The enhanced yield is around 7.1% grossed up for franking credits vs 6.4% in March, according to the broker.
Rating upgraded to Outperform from Hold on wider discount, Z-score and income per dollar investment.
No target price set.
ELDERS LIMITED ((ELD)) Upgrade to Overweight from Market Weight by Wilsons.B/H/S: 0/0/0
Wilsons saw how Elders posted a soft 1H25, with EBITDA below forecast and working capital pressure continuing to build.
Despite solid cost control, earnings fell short. Gross profit missed by -4%, dragged lower by Retail Products. Operating cash flow halved year-on-year, and leverage is now forecast to push past the groups comfort zone.
Yet, Wilsons sees upside. While timing of the ACCCs decision on the proposed acquisition of Delta Agricultural (due 29 May) looms as a swing factor, the broker argues the market is too focused on risk, ignoring Elders through-the-cycle earnings capacity and potential step-up in FY26-27 as Delta integrates.
System upgrades remain a known wildcard. The broker's price target drops to $8.22 but rating is upgraded to Overweight from Market Weight.
On Wilsons' projections, Elders will be paying 36c in dividends to shareholders for many years into the future.
MICROBA LIFE SCIENCES LIMITED ((MAP)) Upgrade to Buy from Buy, High Risk by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity has revised its estimates for Microba Life Sciences after considering a prescriber-based model across Australia, UK and the US markets.
Target price revised down to 26c from 44c as the broker assumes a conservative market adoption rate for MetaXplore and Meta Panel in all three key markets.
The sales assumptions in the forecasts, however, only include Australia and UK, where the operations currently sit. The US opportunity is estimated separately.
Rating revised to Buy from Speculative Buy.
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ALS LIMITED ((ALQ)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden downgrades ALS Ltd to Underweight from Neutral due to the run-up in the share price, which is currently reflecting earnings upgrades, according to the analyst.
Research was issued before the company was due to report FY25 results today, with guidance for net profit after tax of $310m$313m, with Jarden positioned at the midpoint.
On balance, Jarden views the risks as slanted to the downside, with volatility in sampling flows and Bloomberg capital raising data indicating the commodity markets were down in Canada by -28% and Australia down -40% following a robust 3Q25.
Target price lifts slightly to $15 from $14.50.
OFX GROUP LIMITED ((OFX)) Downgrade to Market Weight from Overweight by Wilsons and Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0
Wilsons downgraded OFX Group following a disappointing FY25 result and an accelerated reinvestment strategy that defers material benefits of its New Corporate Platform (NCP) to FY28 and beyond.
FY25 net operating income fell -6% and 2H25 missed revenue growth guidance. FY25 EBITDA declined -11% to $57.7m and EPS fell -16% to 10.7cps.
The broker expects a 15% lift in opex in FY26. Earnings (EBITDA) margin is forecast to fall to around 16%.
The accelerated spend triggers execution risk, macro uncertainty, and likely ASX300 removal in the near term, Wilsons explains.
The analyst's earnings forecasts for FY26-27 are cut by -48% to -83%. FY26 EPS is now expected at 2.7cps, down from 13.8cps.
Target price falls to 94c.
OFX Group's FY25 result missed Canaccord Genuity's forecasts at all levels, and the implied net operating income (NOI) in 2H fell -8% to $104m, lower than company guidance of over $112m.
Commentary suggests the key takeaway from the result was the company's focus on accelerating the rollout of its New Corporate Platform, and hence the requirement of -$24m higher capex and -$5m higher opex in FY26.
No NOI guidance was provided for FY26-27, but the company maintained the target of over 15% NOI growth for FY28 and beyond.
The broker cut FY26-28 NOI forecasts, which, together with higher opex, led to a -49% cut to FY26 EBITDA, -44% cut to FY27 EBITDA and -42% cut to FY28.
Rating downgraded to Hold from Buy. Target price $1.
ORIGIN ENERGY LIMITED ((ORG)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden notes the APLNG contract price review initiated by Sinopec concluded with a price lower than its forecasts. As a result, the broker cut Origin Energy's (27.5% stake in APLNG) FY25-26 EPS forecasts by up to -3%.
The new price formula will last until the contract expiry, but APLNG has an option to request a price review in 2030, meaning there's only upside risk to the price.
Broadly, the broker reckons the rally in the company's share price is surprising given headwinds from lower oil prices, APLNG price review and the possibility of APLNG capex increase. Rating therefore downgraded to Underweight from Neutral.
Target price cut to $10.05 from $10.25.
The above dates from May 23. The below is from three days later, on May 26.
Jarden describes Origin Energys latest update as mixed. FY25 Energy Markets earnings guidance was raised to $1.3-1.4bn from $1.1-1.4bn, due to stronger generation, favourable market conditions, and lower green certificate costs.
This prompts a modest 3.1% upgrade to the broker's FY25 Energy Markets earnings (EBITDA) forecast to $1.36bn.
The downside came from Octopus Energy, with FY25 earnings downgraded by -$100m due to unusually warm spring weather in the UK, note the analysts. One-off effects tied to the 2022 UK price guarantee scheme also weighed.
Jarden has left its valuation of Octopus unchanged but raised the Energy Markets valuation by 10c per share, lifting the Origin target price to $10.15 from $10.05. Underweight retained.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | BIG RIVER INDUSTRIES LIMITED | Buy | Neutral | Taylor Collison | |
| 2 | DJERRIWARRH INVESTMENTS LIMITED | Buy | Neutral | Taylor Collison | |
| 3 | ELDERS LIMITED | Buy | Neutral | Wilsons | |
| 4 | MICROBA LIFE SCIENCES LIMITED | Buy | Buy | Canaccord Genuity | |
| Downgrade | |||||
| 5 | ALS LIMITED | Sell | Neutral | Jarden | |
| 6 | OFX GROUP LIMITED | Neutral | Buy | Wilsons | |
| 7 | OFX GROUP LIMITED | Neutral | Buy | Canaccord Genuity | |
| 8 | ORIGIN ENERGY LIMITED | Sell | Neutral | Jarden | |
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