In Case You Missed It – BC Extra Upgrades & Downgrades – 06-06-25

This story features BRICKWORKS LIMITED, and other companies.
For more info SHARE ANALYSIS: BKW
The company is included in ASX200, ASX300 and ALL-ORDS

Broker Rating Changes (Post Thursday Last Week)

Downgrade

BRICKWORKS LIMITED ((BKW)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Jarden views the proposed merger between Brickworks and Washington H. Soul Pattinson as strategically sound.

The merger removes the cross-shareholding structure and unlocks a -24% conglomerate discount embedded in Brickworks’ share price, note the analysts.

Brickworks shareholders would receive 0.82 MergeCo shares per Brickworks share, implying to the broker a value of $30.28, representing a 10-22% premium to recent trading levels and volume weighted average price (VWAP).

The analysts expect the deal to improve liquidity, simplify the capital structure, and enable longer-term decision-making less tied to the housing cycle. Minimal synergies and estimated stamp duty costs of around -$250m are also noted.

Jarden forecasts completion by October 2025, pending approvals, and expects MergeCo to be net cash post-deal with Brickworks’ industrial and investment interests housed in the private equity segment.

Jarden raises the target price to $32.30 from $25.00 and downgrades Brickworks to Neutral from Overweight.

FONTERRA SHAREHOLDERS FUND ((FSF)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Fonterra Shareholders Fund once again upgraded EPS guidance for FY25, this time to NZ65-75c from NZ55-75c, prompting Jarden to upgrade its FY25 normalised EPS forecast to NZ74c from NZ64c.

The broker also lifted FY25 dividend forecast by NZ10c. For FY26, the broker left the EPS forecast largely unchanged.

Rating downgraded to Neutral from Overweight. Target lifted to NZ$5.87 from NZ$5.19.

IDP EDUCATION LIMITED ((IEL)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0

Jarden cites reduced confidence in student flow forecasts, government policy, and internal oversight as reasons for reassessing IDP Education’s outlook. The broker’s target price is cut to $6.95 from $17.35 and the rating downgraded to Neutral from Overweight.

Guidance for 2025 points to student placement volumes falling -28-30% year-on-year and IELTS volumes retreating -18-20%, both much weaker than Jarden and consensus projections.

Costs are expected to be less contained than previously indicated, while price improvements in student placements are projected to ease in the second half, particularly in higher-fee destinations such as the UK.

Jarden lowers its 2025 earnings (EBITDA) expectations to $174.7m, or -34% below the prior year, and cuts its 2026 forecast by -63% to $148m, noting both reduced margin assumptions and overhead flexibility.

MAC COPPER LIMITED ((MAC)) Downgrade to Hold from Buy by Moelis.B/H/S: 0/0/0

Following MAC Copper’s agreement to a US$12.25/share all-cash takeover offer from South African miner Harmony Gold, Moelis has lowered its target price to match the offer price.

Target price cut to $18.93 from $25.00. Rating downgraded to Hold from Buy.

The broker now believes a rival bid is unlikely, and investors could put these funds elsewhere or wait for cash settlement upon deal completion.

TREASURY WINE ESTATES LIMITED ((TWE)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0

Jarden cuts its FY26-27 earnings (EBIT) forecasts for Treasury Wine Estates by -6% due to soft US demand, the distributor exit from California, and currency pressure.

The broker notes FY25 EBITS guidance remains unchanged at around $770m, though the RNDC (distributor) exit from California, which made up circa 25% of Americas net sales revenue, is expected to weigh on FY26.

Penfolds and the Americas luxury portfolio are forecast to represent over 85% of group EBIT by FY26, with Jarden seeing re-rating potential if Penfolds achieves peer-level multiples.

The broker views a potential future demerger into Penfolds, Americas luxury, and Global Premium as strategically compelling.

Jarden downgrades to Overweight from Buy and lowers the target price to $10.60 from $13.90.

Price Target Changes (Post Thursday Last Week)

More Highlights

ARX    AROA BIOSURGERY LIMITED

Pharmaceuticals & Biotech/Lifesciences Overnight Price: $0.47 

Canaccord Genuity rates ((ARX)) as Buy (1)

Aroa Biosurgery reported FY25 result, with Canaccord Genuity noting revenue and earnings (EBITDA) came in slightly above guidance, with the FY26 outlook offered viewed as both “achievable” and conservative.

The broker highlights good growth for Myriad, up 38% over the period, and this is anticipated to be the growth driver for the company.

Canaccord Genuity sees Aroa as a med-tech story whereby sales growth is expected to exceed cost growth as the team matures and new reps are added.

No change to Buy rating and 90c target price.

This report was published on May 30, 2025.

Target price is $0.90 Current Price is $0.47 Difference: $0.435
If ARX meets the Canaccord Genuity target it will return approximately 94% (excluding dividends, fees and charges).
The company’s fiscal year ends in March.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 1.92 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 24.28.

Forecast for FY27:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.
Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

BTR    BRIGHTSTAR RESOURCES LIMITED

Gold & Silver Overnight Price: $0.59 

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

Petra Capital initiates coverage on Brightstar Resources with a Buy rating and $1.20 target.

The company has positioned itself as a future 200koz per annum gold producer, with near-term cashflow already initiated via toll-treatment agreements at its Laverton hub, highlights the broker.

The analyst points out the resource base has expanded to 3moz through aggressive M&A, acquiring assets at an average of $36/oz compared to a sector average of $99/oz.

A definitive feasibility study (DFS) for Laverton is due in June 2025, targeting initial standalone production of 80kozpa by 2027 and group output exceeding 200kozpa by FY30. This is when Sandstone and Menzies hubs come online.

Management is described as highly experienced across mine development and geology, with key leadership drawn from prior successes at Westgold Resources ((WGX)), Ramelius Resources ((RRL)) and Pilbara Minerals ((PLS)).

This report was published on May 29, 2025.

Target price is $1.20 Current Price is $0.59 Difference: $0.61
If BTR meets the Petra Capital target it will return approximately 103% (excluding dividends, fees and charges).
The company’s fiscal year ends in June.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of 0.10 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 590.00.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 9.30 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 6.34.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

D2O    DUXTON WATER LIMITED

Agriculture Overnight Price: $1.53 

Petra Capital rates ((D2O)) as Buy (1)

Following shareholder approval to internalise management at the 2024 AGM, Petra Capital believes Duxton Water has removed the final major hurdle for many potential investors.

Previously the manager (Duxton Capital) was a separate legal entity, and  there was less direct alignment with shareholders compared to internal management.

The broker expects a seamless transition, with focus now shifting to capitalising on favourable market conditions.

With the business offering pure exposure to Australian water entitlements (an asset class delivering 7-9% compound growth since 2007), the broker considers the company a compelling investment.

The analyst believes earnings and cash flow will rebound sharply in 2025, underpinned by drier weather and rising entitlement values. 

Petra Capital retains a Buy rating and a $2.10 target price

This report was published on June 2, 2025.

Target price is $2.10 Current Price is $1.53 Difference: $0.565
If D2O meets the Petra Capital target it will return approximately 37% (excluding dividends, fees and charges).
The company’s fiscal year ends in December.

Forecast for FY25:

Petra Capital forecasts a full year FY25 dividend of 7.40 cents and EPS of 18.00 cents.
At the last closing share price the estimated dividend yield is 4.82%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 8.53.

Forecast for FY26:

Petra Capital forecasts a full year FY26 dividend of 7.70 cents and EPS of 10.50 cents.
At the last closing share price the estimated dividend yield is 5.02%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 14.62.

All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

GYG    GUZMAN Y GOMEZ LIMITED

Food, Beverages & Tobacco Overnight Price: $30.39 

Goldman Sachs rates ((GYG)) as Sell (5)

Goldman Sachs highlights Guzman y Gomez’s long-term value proposition is in the store roll-out targets, but believes those are overly optimistic. The broker cites limited precedent in the Australian market and development challenges.

For context, the company is targeting 30 new stores annually in the near term, accelerating to 40 stores within 5 years to reach a long-term target of 1,000 stores after 20-plus years.

The broker cut FY25-27 net profit forecasts mainly due to lower forecast earnings in the US. Sell. Target price $29.

This report was published on May 27, 2025.

Target price is $29.00 Current Price is $30.39 Difference: minus $1.39 (current price is over target).
If GYG meets the Goldman Sachs target it will return approximately minus 5% (excluding dividends, fees and charges negative figures indicate an expected loss).
Current consensus price target is $38.00, suggesting upside of 26.2%(ex-dividends)
The company’s fiscal year ends in June.

Forecast for FY25:

Goldman Sachs forecasts a full year FY25 dividend of 0.00 cents and EPS of 16.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 189.94.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 12.3, implying annual growth of N/A.
Current consensus DPS estimate is 4.7, implying a prospective dividend yield of 0.2%.
Current consensus EPS estimate suggests the PER is 244.9.

Forecast for FY26:

Goldman Sachs forecasts a full year FY26 dividend of 0.00 cents and EPS of 28.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 108.54.

How do these forecasts compare to market consensus projections?

Current consensus EPS estimate is 24.7, implying annual growth of 100.8%.
Current consensus DPS estimate is 12.0, implying a prospective dividend yield of 0.4%.
Current consensus EPS estimate suggests the PER is 121.9.

Market Sentiment: 0.7
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

REG    REGIS HEALTHCARE LIMITED

Aged Care & Seniors Overnight Price: $7.97 

Jarden rates ((REG)) as Overweight (2)

Jarden notes the government’s announcement of a delay in the implementation of the Aged Care Act by four months will offer breathing space for aged care providers.

However, it also means there will be a delay in receiving the 2% refundable accommodation deposit and daily accommodation payment indexation for new residents.

EPS forecast for Regis Healthcare cut by -3.5% for FY26.

Target price trimmed to $7.74 from $7.75. Overweight retained.

This report was published on June 4, 2025.

Target price is $7.74 Current Price is $7.97 Difference: minus $0.23 (current price is over target).
If REG meets the Jarden target it will return approximately minus 3% (excluding dividends, fees and charges negative figures indicate an expected loss).
The company’s fiscal year ends in June.

Forecast for FY25:

Jarden forecasts a full year FY25 dividend of 13.70 cents and EPS of 17.70 cents.
At the last closing share price the estimated dividend yield is 1.72%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 45.03.

Forecast for FY26:

Jarden forecasts a full year FY26 dividend of 16.90 cents and EPS of 23.90 cents.
At the last closing share price the estimated dividend yield is 2.12%.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 33.35.

Market Sentiment: 1.0
All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

RXR    ROBEX RESOURCES INC

Gold & Silver  

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

Robex Resources has begun trading on the ASX (today), with first gold from its Kiniero project in Guinea expected by December. The shares were already listed on the TSX Venture Exchange in Toronto and will retain that listing.

Canaccord initiates coverage post ASX IPO with a Speculative Buy and a $5.00 target price, but since the broker already covered the stock on the TSX-V, it’s not officially called an initiation.

Robex is one of few new African gold names to join the ASX, and its oxide ore profile, prior production history, and experienced team offer near-term appeal, the broker posits.

This report was published on June 5, 2025.

Target price is $5.00
The company’s fiscal year ends in December.

Forecast for FY25:

Canaccord Genuity forecasts a full year FY25 dividend of 0.00 cents and EPS of minus 5.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 0.00.

Forecast for FY26:

Canaccord Genuity forecasts a full year FY26 dividend of 0.00 cents and EPS of 77.00 cents.
At the last closing share price the stock’s estimated Price to Earnings Ratio (PER) is 0.00.

All consensus data are updated until yesterday. FNArena’s consensus calculations require a minimum of three sources

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