Weekly Reports | 10:00 AM
Weekly update on stockbroker recommendation, target price, and earnings forecast changes.
By Mark Woodruff
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 August 11 to Friday August 15, 2025
Total Upgrades: 11
Total Downgrades: 14
Net Ratings Breakdown: Buy 59.89%; Hold 31.72%; Sell 8.39%
At the mid point of reporting season, for the week ending Friday, August 15, 2025, FNArena tracked eleven upgrades and fourteen downgrades for ASX-listed companies from brokers monitored daily.
During results season, this article aims to provide commentary on the tables below while also complementing FNArena’s Corporate Results Monitor, which keeps tabs on all the beats, misses, and in-line results at https://fnarena.com/index.php/2025/08/08/fnarena-corporate-results-monitor-08-08-2025/
In common with the Monitor, the tables reflect earnings 'beats' for LGI, Life360, and Pro Medicus, along with 'misses' for AGL Energy, Treasury Wine Estates, and Vista International.
Releasing disappointing numbers and then seeing the share price selling off can ultimately have a positive impact on ratings. AGL Energy received upgrades from two separate brokers but Beach Energy and Treasury Wine Estates received two downgrades apiece.
After cutting respective targets for AGL Energy to $11 from $12 and to $10.65 from $11.50, Ord Minnett and UBS upgraded their ratings to Buy from Hold (or equivalent) on valuation (cheaper share price).
UBS also highlighted an attractive fully franked yield along with the underlying defensive utility exposure, leveraged to energy transition upside via higher electricity demand and prices.
Ord Minnett conceded near-term earnings are pressured by higher costs, but the longer-term outlook has improved with clearer visibility on coal and gas contract rollovers and a stronger-than-expected contribution from Battery Energy Storage System operations, though execution risk remains.
For more background and colour on AGL Energy’s FY25 result: https://fnarena.com/index.php/2025/08/15/agl-short-term-pain-long-term-gain/
For Beach Energy, Macquarie noted M&A capacity is now constrained by a negative FY26 free cash flow outlook with gearing expected to rise to around 17%. Morgans also cautioned the company has been hurt by poor execution from its Waitsia partner Mitsui and its contractors, and warns this risk will persist even after production begins.
For Treasury Wine Estates, here Citi felt market expectations for growth in China will have to be scaled back. Citi also reminded investors industry research over the year had already led this broker to become more cautious on management’s ability to deliver its Penfolds guidance for the years ahead.
Management will proceed with a buyback of up $200m, but Morgan Stanley noted this level was lower than prior expectations, likely due to caution on the balance sheet.
As a result of disappointing the market, AGL Energy, Treasury Wine Estates and Beach Energy appear first, third and fifth on the table below for negative change to average targets by brokers, with falls of around -8%, -6%, and -5%, respectively.
JB Hi-Fi received no less than three ratings upgrades after FY25 results exceeded market expectations and fills tenth place on the positive change to average target price table with a near 6% rise. For more details see https://fnarena.com/index.php/2025/08/13/jb-hi-fis-re-rating-triggers-valuation-dilemma/
Another notable move in the tables below concerns the 33% rise in average target for Coronado Global Resources in contradiction to its interim result disappointing against market expectations. The general view is the future looks brighter.
The key takeaway for UBS were the breakeven earnings achieved in the second quarter, highlighting the potential for more sustainable earnings in the December half. It’s also felt the June half showed encouraging signs of discipline on costs, capex, and project execution.
Bell Potter agreed operational performance is set to lift with the ramp-up of Mammoth underground and the Buchanan expansion projects, supporting production volumes and lower unit costs.
The analysts at UBS see limited downside to met coal prices below US$180/t.
Average target prices for Life360 and Nick Scali also rose by 17%, as explained at https://fnarena.com/index.php/2025/08/14/life360-not-just-another-app/ and https://fnarena.com/index.php/2025/08/12/strong-momentum-underpins-nick-scalis-fy26/
Overall, rises in average targets clearly outpaced falls.
As explained in last week’s article, when it comes to rises in average earnings forecasts, increases generally outweigh declines, but we're no longer comparing apples with apples, as some of the upward revisions stem from brokers rolling forward their financial models to FY26 forecasts (companies having released FY25 financials).
Temple & Webster heads up the earnings upgrade table and continues to gain market share, but equally faces valuation headwinds.
Sell-rated UBS views its valuation as extreme, yet sees limited potential negative catalysts to disrupt the company’s current top-line momentum.
By contrast, Morgan Stanley highlighted improving consumer sentiment and noted management is investing for growth, with lowest price, fastest delivery, and widest range creating a compelling value proposition.
Next up on the positive change to earnings table are lithium miners IGO Ltd and Pilbara Minerals with increases in average FY25 forecast earnings of 57% and 47%, respectively.
Citi explained the world’s largest manufacturer of lithium-ion batteries, Contemporary Amperex Technology Co (CATL), has suspended production at its Jiangxi lithium mine for three months.
This news prompted UBS to raise its forecast spodumene SC6 CFR China prices for 2025-2028 by 17%, 27%, 27%, and 16%, respectively, to US$838/US$950/US$1050 and US$1,100/t, respectively, against the spot price of US$820/t.
As a result, this broker’s respective targets for IGO Ltd and Pilbara Minerals jumped by 33% and 45% to $4.80 and $1.60.
On implied pricing, the analysts at Citi point out IGO Ltd is trading as if lithium were around US$1300/t versus spot at circa US$825/t, while Pilbara Minerals is trading as if lithium were around US$1200/t.
Citi’s preferred ASX100 exposure is Neutral-rated Pilbara Minerals, while Patriot Battery Metals ((PMT)) is rated Buy among small caps.
Also receiving a boost to average earnings forecast is Neuren Pharmaceuticals.
Neuren’s commercial partner Acadia, in its second quarter update, reported continued volume and sales growth for Daybue in the US market, with European expansion still on track for 2026.
The royalty stream from this first and only FDA-approved treatment for Rett syndrome is an increasingly stable and growing source of income, with Bell Potter estimating this is worth around $9.00 per share in discounted present value terms.
Amplitude Energy received the largest fall in average earnings forecast last week, solely due to an general update of Morgans across its Oil & Gas sector coverage.
The adjustment to Amplitude’s earnings forecast by the broker had an outsized impact due to the small numbers involved.
Amplitude remains Morgans' sole top pick among small caps in the sector. It’s thought the company’s rising output, and ongoing cost reductions, along with management’s strong operational execution reinforce the investment case.
Overall, the broker maintains a Neutral sector stance, noting spot Brent and JKM are trading only slightly below base-case ranges despite re-rated sector equities.
With market valuations recovering even as Brent prices soften, the analyst believes much of the ‘easy money’ in the sector has already been made.
Total Buy ratings in the database comprise 59.89% of the total, versus 31.72% on Neutral/Hold, while Sell ratings account for the remaining 8.39%.
Upgrade
LIFE360 INC ((360)) Upgrade to Accumulate from Hold by Ord Minnett .B/H/S: 5/0/0
Ord Minnett upgrades Life360 to Accumulate from Hold and raises the target price to $45 from $39, post the company's better than expected 2Q2025 earnings results and an upgrade in 2025 guidance.
Monthly average users growth came in above consensus growth expectations, with additional margin expansion. The platform has around 88m customers globally, of which the US market represents 47.5m and 40.5m internationally, with circa 3.1m in Australiasia.
The analyst believes there is a lot more left in the Life360 "tank" in spite of the earnings upgrade, and 2H2025 guidance errs on the conservative side.
Recent growth rates in paying customers, annual monthly recurring revenue, and average revenue per paying circle infer FY26 revenue could exceed US$600m.
Ord Minnett upgrades its EPS estimates by 21.7% for 2025 and 22% for 2026.
AGL ENERGY LIMITED ((AGL)) Upgrade to Buy from Hold by Ord Minnett and Upgrade to Buy from Neutral by UBS .B/H/S: 4/1/0
Ord Minnett notes AGL Energy's FY25 earnings fell short of its estimate by -5% and the consensus by -7%, impacted by outages at two power stations.
FY26 guidance was also a disappointment, falling short of the consensus by -3% on EBITDA and by -11% on net profit.
The company highlighted contribution from battery storage systems will offset oil and gas contract rollovers in FY28, but the broker expects net profit impact to be minimal.
Overall, a -18.8% cut to the broker's FY26 EPS forecast and a -21.3% cut to FY27, with FY28 seeing a tiny 0.6% lift.
Target cut to $11 from $12. Rating upgraded to Buy from Hold on valuation.
AGL Energy's soft FY25 report has put the share price under pressure, but UBS is suggesting the market is too short-sighted. At the current price margin compression is being accounted for, but not the EPS upside longer term.
Hence, the broker has upgraded to Buy from Neutral.
UBS argues cheap legacy gas and coal supply contracts expiring and being replaced with higher cost fuels is now factored in, but this impact can be entirely overwhelmed by new earnings from accelerated investment in grid-scale batteries.
For now, forecasts have been reduced, with negatives (see also above) partially offset by a higher electricity pricing outlook. Target drops to $10.65 from $11.50.
Origin Energy ((ORG)) is the broker's sector favourite, with APA Group ((APA)) least preferred. AGL Energy sits in between.
ARB CORPORATION LIMITED ((ARB)) Upgrade to Neutral from Sell by UBS .B/H/S: 5/1/0
UBS upgraded ARB Corp to Neutral from Sell on moderation in the downside risk underlying its previous Sell rating.
The renewed assessment follows a re-basing of forward margin expectations, stabilisation in domestic new vehicle sales, and higher US cost investment.
The broker notes profit before tax (PBT) margins have been cut to 18.9% from 20.8% over the last 12 months, and medium-term consensus pre-tax profit is now -12% lower.
The broker's FY25 PBT forecast is -5% below the consensus and for FY26 it is -8% below. Target lifted to $35 from $31 on higher valuation multiple.
DEXUS INDUSTRIA REIT ((DXI)) Upgrade to Buy from Hold by Bell Potter .B/H/S: 3/0/0
Dexus Industria REIT reported a slight beat on funds from operations at 18.2c for FY25, some 0.5% above Bell Potter's estimate and 1.5% above consensus.
FY26 guidance was set at 17.3c funds from operations, below both the analyst and consensus expectations by around -6%, with a dividend guidance of 16.6c.
Bell Potter lowers its funds from operations estimates by -8% for FY26 to -5% for FY28 due to dilution from the sale of Brisbane Technology Park, an updated bank bill swap rate assumption, and the impact of recent half-year earnings.
Due to the stock's relative underperformance versus the XJP REIT index, Dexus Industria is upgraded to Buy from Hold. The target is lifted to $3.10 from $2.95.
JB HI-FI LIMITED ((JBH)) Upgrade to Trim from Sell by Morgans and Upgrade to Neutral from Sell by UBS and Upgrade to Outperform from Neutral by Macquarie .B/H/S: 3/1/1
JB Hi-Fi’s FY25 result was broadly in line with Morgans' expectations, with underlying profit up 8.5% to $476.1m,. Its felt share price weakness in reaction reflects high expectations after a strong run-up.
Fourth-quarter sales in JB Hi-Fi Australia were boosted by the Nintendo Switch 2 launch, explain the analysts, with similar momentum in New Zealand and solid growth at The Good Guys. Less positively, the broker notes July trading showed some slowing.
Gross margins were stable overall, with The Good Guys delivering a standout 2H improvement, and costs were well managed, according to Morgans.
The payout ratio will rise from 65% to 70–80% from FY26, likely ending special dividends, suggests the broker, after a strong year of cash generation and a 100c final special dividend.
Morgans raises its target price to $95 from $92. While noting the business is fully valued, the broker upgrades its rating to Trim from Sell.
UBS upgrades JB Hi-Fi to Neutral from Sell, with a higher target price of $112 from $109.
The analyst attributes the fall in the share price of -8.4% on the FY25 results to confusion around reported earnings, including the ACCC cost of -$13.7m not reflected in market estimates. Underlying earnings came in above both consensus and the analyst's estimate.
Growth in like-for-like sales in July for both JB Australia and The Good Guys needs to come in above the two-year average to achieve 1H26 consensus expectations, which UBS believes the company can achieve.
The CEO transition was announced earlier than expected. Equally, the share price has advanced 27% in 2025 versus the ASX200, which was up 8% up until August 8.
The analyst raises its EPS forecast by 1% for FY26 and 2% for FY27.
The highlight of JB Hi-Fi's FY25 result for Macquarie was the special dividend of 100c which beat its 80c estimate. The broker reckons the increase in payout ratio to 70-80% from 65% is a prudent move given cash generation and balance sheet strength.
FY25 result broadly met the broker's forecast and was 1% higher than the consensus. Trading details for 4Q and update for July showed solid growth was maintained after the outsized 8.2% y/y growth in 4Q boosted by Nintendo Switch 2 pre-orders.
The broker lifted medium-term sales forecast to an average 5% growth over the next three years. EPS forecasts lifted by up to 2% over FY26-28.
Target lifted to $118 from $112. Rating upgraded to Outperform from Neutral.
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