Weekly Reports | 10:00 AM
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 July 14 to Friday July 18, 2025
Total Upgrades: 6
Total Downgrades: 20
Net Ratings Breakdown: Buy 60.76%; Hold 31.52%; Sell 7.71%
For the week ended Friday, July 18, 2025, FNArena tracked six upgrades and twenty downgrades for ASX-listed companies from brokers monitored daily.
Nearly half of the downgrades resulted from a prereview to the upcoming reporting season for Australian REITs by Macquarie.
The broker believes FY26 guidance will likely be a key differentiator, with some REITs poised to return to growth while others continue to face structural and market headwinds.
Macquarie's assessment suggests the sector remains expensive, with asset values still exposed to downside risk given stretched relative returns and wide bid-ask spreads amid limited transactional evidence.
As a result, downgrades ensued for Goodman Group, Scentre Group, Vicinity Centres, Charter Hall Group, Centuria Capital, Charter Hall Long WALE REIT, Charter Hall Retail REIT, Centuria Industrial REIT, and Growthpoint Properties Australia.
Macquarie's preferred exposures are Mirvac Group, GPT Group, Dexus, DigiCo Infrastructure REIT, Arena REIT, and Qualitas.
Least preferred are Scentre Group, Vicinity Centres, Charter Hall Group, Charter Hall Long WALE REIT, and Charter Hall Retail REIT.
For the week, rises in average target prices generally outweighed falls while the tables below show decreases in average earnings forecasts held sway over increases.
The average target for Johns Lyng rose by nearly 14% after management entered into a Scheme Implementation Deed with an entity controlled by Pacific Equity Partners at $4.00 per share.
Morgans views the offer as reasonable in light of recent share price weakness and near-term earnings softness as the company works to rebuild business-as-usual (BAU) volumes in its NSW Insurance Building and its Restoration Services (IB&RS) division.
Investors are advised to await the required approvals from FIRB, ASIC, and the ASX, or maybe a superior offer might emerge?
Morgan Stanley notes CEO and Managing Director Scott Didier, who holds approximately 17.6% of Johns Lyng shares, intends to vote in favour of the Scheme and will roll his stake into the new entity via scrip.
Other key members of management have also signalled their support and intention to participate on the same terms.
Oil and gas exploration and production company Amplitude Energy's average target price jumped by just over 13%, as fourth quarter FY25 results came in slightly ahead of Macquarie's expectations. While some concern centred on weaker cash conversion, the broker attributed this to timing rather than underlying performance.
Production and sales were 16% higher than the prior quarter, mostly on strong performance at Orbost and the impact of maintenance in the prior quarter, explained Bell Potter.
With utilisation rising at the company's two Victorian gas plants amid a tight market, the analyst at Macquarie sees a clear path to 38c (shares closed last Friday at 24.5c).
Following this month's June quarter update, the average target for digital wealth platform provider Hub24 also rose by 10%.
UBS expects Hub24's stronger net inflow momentum will drive further market share gains over the medium term, reinforcing the broker's relative preference for the company over competitor Netwealth Group.
Morgan Stanley highlighted the company's strong net revenue retention (NRR) metric, which is highly correlated with a premium multiple for software stocks, as a foundation for years of durable growth.
More broker views on the relative merits of both Hub24 and Netwealth Group are available at https://fnarena.com/index.php/2025/07/18/june-quarter-hub24-outgrows-netwealth/
Regarding positive changes to average earnings forecasts, here Hansen Technologies (a global provider of software and services to the energy, water, and communications industries) led the pack with a 19% increase in response to an upgrade in management's FY25 guidance.
New research by broker Moelis highlighted the turnaround of the 2024 acquisition of German software platform acquisition powercloud as a meaningful near-term earnings growth opportunity, setting a 12-month target price of $6.00 and starting with a Buy rating.
Hansen offers a differentiated investment case among Australian software stocks under Morgan Stanley's coverage due to consistently strong earnings and free cash flow generation over an extended period.
More broker views can be accessed via https://fnarena.com/index.php/2025/07/16/market-embraces-hansens-powercloud-surprise/
Specialist alternative investment manager Regal Partners enjoyed a nearly 15% rise in average earnings forecast.
Morgans updated its earnings estimates to reflect the announcement of at least $35m in first half 2025 performance fee revenue. The broker had forecast no performance fee for the period.
The uplift was driven by strong performance from global long/short equity strategies, notably PM Capital's global equities strategy and the new Regal Global Small Companies Fund.
Bell Potter highlighted a strong rebound in the second quarter across funds under management, management fees, and future performance fee potential.
While the share price has recovered from its lows, the broker felt recent momentum is not yet fully reflected in the valuation, which remains well below historical highs.
On the flipside, 29Metals, Iluka Resources, and South32 experienced material declines in average earnings forecasts.
Following June quarterly reporting, Citi noted 29Metals is currently tracking just below the lower end of its annualised production guidance, though output is expected to be second half weighted.
Given the company's high leverage to base metal prices, the broker maintains its view further liquidity raising events are likely in the medium term to meet significant upcoming debt repayments. This broker raised its target to 16c from 15c.
29Metals is primarily focused on copper, with significant base and precious metals by-products. With a bearish outlook on copper, forecast to fall below US$9,000/t in the near term, Citi retains a Sell rating.
Iluka Resources shares rallied last week following a US Department of Defence deal with US-based MP Materials, which includes a 10-year price floor of US$110/kg for NdPr versus spot of US$63.6/kg.
Unfortunately, the deal was exclusive to MP Materials, highlighted Ord Minnett, reflecting the US's strategic interests and "America First" policies and doesn't have implications for other companies, such as Iluka.
This broker cut its target to $5.50 from $5.90 on revisions to price forecasts for rare earth oxides and mineral sands and downgraded to Accumulate from Buy.
Management at South32 withdrew FY26 production guidance for the Mozal aluminium smelter due to unresolved power supply negotiations. A potential asset impairment was also flagged for FY25 results, noted Macquarie.
The Mozambique government also pointed to possible power supply impacts from drought conditions, and FY26 production guidance is now being reviewed by management.
UBS increased its expected power costs at Mozal, which resulted in a valuation reduction of around -US$400m.
The only material negative change to average target price (-8%) last week befell Helloworld solely because Morgans resumed coverage with a target price of $1.76, below the existing targets of Ord Minnett and Shaw and Partners in the FNArena database for $1.90 and $2.70, respectively.
Analysts at Morgans have revised their FY25 earnings forecast down by -7%, now sitting at the lower end of management's guidance range of $52-56m, to reflect softening second-half trends and lower interest income.
Forecasting accuracy remains limited, cautioned the broker, until there is clearer evidence of a return to organic earnings growth.
Total Buy ratings in the database comprise 60.76% of the total, versus 31.52% on Neutral/Hold, while Sell ratings account for the remaining 7.71%.
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