Weekly Ratings, Targets, Forecast Changes – 19-09-25

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

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 September 15 to Friday September 19, 2025
Total Upgrades: 10
Total Downgrades: 14
Net Ratings Breakdown: Buy 59.03%; Hold 32.13%; Sell 8.85%

For the week ending Friday, September 19, 2025, FNArena tracked ten upgrades and fourteen downgrades for ASX-listed companies from brokers monitored daily.

The size of percentage rises in average target prices outweighed reductions for the fourth week in a row, with Pantoro Gold and Vault Minerals leading the way with rises of circa 9% and 8%, respectively.

Analysts at Morgans initiated coverage on Pantoro which runs the Norseman project in Western Australia, a historic gold field which has already produced more than 5.5m ounces since the 1930s.

Morgans initiated with a Hold rating and a $5.33 target, slightly above the prior $5.20 average of the two brokers already covering the stock in the FNArena database.

Right now, Pantoro is producing at an annualised rate of over 100koz, and the analysts see plenty of upside in both grades and resource growth. They model production rising to around 145koz by FY28, with further gains possible if grades improve.

Norseman is cashflow positive, highlights the broker, backed by strong infrastructure, and management has now cleared debt and consolidated ownership. With average earnings margins above 50% and forecast earnings of about $267m a year over the next eight years, the project looks robust, in Morgans’ view.

The average target for Vault Minerals benefited from higher gold price forecasts at UBS.

With the US Federal Reserve cutting rates, this broker has raised its short to medium-term gold forecasts by 9-12% across FY26-28 to respectively US$3,825, US$3,650 and US$3,350 an ounce, peaking at US$3,900 in the third quarter of FY26. The longer-term estimate stays at US$2,800.

These upgrades feed through to stronger earnings forecasts for gold stocks under coverage by UBS, with forecasts for FY26 and FY27 rising 18-29% and price targets lifting by 6-25%.

The best opportunities are seen among mid-cap growth names with the broker highlighting Genesis Minerals, Perseus Mining, and Vault Minerals.

In a wider look at Australian Resources, UBS also noted the trade war and broader macro risks it worried about in the second quarter of 2025 haven’t played out. In fact, since the broker’s last sector review, the outlook has improved, helped by steadier fundamentals and signs of more M&A activity.

UBS now thinks these factors, together with a better macro backdrop, should keep driving investors back into the mining sector.

Looking out over the year ahead, the broker stays constructive on commodities, pointing to supportive supply trends and long-term demand drivers, especially in copper and aluminium.

While gold still looks good and price forecasts are on the rise, the broker is a little less bullish than at the start of 2025.

Coal and nickel don’t show much downside, but markets aren’t tight in the short-term either, while lithium’s outlook is supportive overall but highly dependent on how China manages supply, explains the broker.

For iron ore, supply could still weigh on the market, but UBS thinks prices around US$100/tonne can hold over the next 6-12 months.

As a result of updated projections and pricing forecasts, the positive change to earnings table below is populated in descending order by Mineral Resources, Boss Energy, Talga Group (graphite), Chalice Mining, South32, and Fortescue, followed by Vault minerals in tenth place due to the broker’s separate gold sector report.

IGO Ltd also appears in this table. The company’s shares have fallen -19% over the past month and now trade below Citi’s $4.40 target, down from $4.50, leading this broker to upgrade its rating to Neutral from Sell.

Uncertainties remain, with the analysts pointing to IGO’s downstream lithium hydroxide Kwinana refinery in Western Australia, where the company’s share of losses has topped -$400m.

Spending at the jointly owned Greenbushes hard-rock lithium mine is also a cause of concern, after first-half 2025 cash flow came in at around -$100m following -$360m in capital expenditure.

Management’s guidance for FY26 capital expenditure of -$575-675m also leaves limited visibility beyond FY27, the broker comments.

Citi continues to favour Pilbara Minerals as its main lithium exposure.

Morgan Stanley also weighed in with updated research on IGO last week. The analysts remain cautious on acquisition risks, particularly with the 100%-owned nickel-copper-cobalt Nova operation approaching its end-of-life in 2026, and the group’s minority position in Greenbushes limiting control.

Turning to the negative, here Audinate Group received the largest fall in average target (-22%), followed by Santos with an around -8% reset.

Morgan Stanley conceded it had previously misread the cycle for Audinate and says the company now must prove itself with tangible results before the market re-rates the stock.

While long-term appeal was noted, FY26 is expected to be tough with higher costs, peak cash burn, and few obvious catalysts. The broker’s target price was slashed to $5 from $11 and the rating downgraded to Equal-weight from Overweight.

In one of the biggest news stories on the exchange last week, management at Santos announced the XRG consortium had withdrawn its bid for the company citing “commercial factors”.

Morgans suggested the withdrawal had damaged the case for a corporate premium and created near-term selling pressure as arbitrage investors exit. The broker’s target was reduced to $7.20 from $8.65 and the rating downgraded to Trim from Accumulate.

Ord Minnett also lowered its target to $8.35 from $8.89, though its rating was upgraded to Buy from Accumulate.

Santos will pay an attractive 2025 dividend, expected to increase  even further across 2027-30 as new production commences and free cash flow builds, explained the analyst. The stock is also considered undervalued on earnings multiples.

Across the tables below, average broker forecast upgrades outweigh downgrades.

While Pilbara Minerals and SiteMinder received the largest downgrades, the percentage changes were exaggerated by the tiny numbers involved.

Reacting to industry feedback on SiteMinder, Ord Minnett noted Channels-Plus still has potential to disrupt the hotel distribution chain, though adoption may take longer than first expected given the complexity of hotel yield management.

Consequently, the broker trimmed its near-term free cash forecasts but lifted medium and long-term expectations.

More positively, Citi suggested the recent UltraSync launch is a key positive, closing a major data gap and strengthening Dynamic Revenue Plus. This product is seen as reinforcing SiteMinder’s role as a central hub for hoteliers.

Telix Pharmaceuticals’ average earnings forecast also fell, but solely because Citi initiated coverage with lower EPS forecasts than the average of three existing brokers in the FNArena database.

Citi began with a Buy, High Risk rating and a $34 target, calling Telix one of its top healthcare picks alongside ResMed and CSL.

With the stock down -54% from February highs, the broker argued the market is only valuing Illuccix (the diagnostic imaging agent for prostate cancer) even though it sees diagnostics worth $25 a share and the drug pipeline adding another $10.

The company’s next-generation prostate cancer imaging agent Gozellix is expected to help offset pricing pressure and expand into frontline diagnosis. The therapeutic program, aimed at treating advanced prostate cancer, TLX591, is also flagged as the key potential blockbuster with phase 3 data due in the second half.

New Hope shares fell last week after releasing FY25 results with FY26 guidance pointing to weaker coal output in FY26.

Macquarie cut its FY26 production forecast by -8%, trimming earnings by -2%, though the FY27 earnings estimate was raised 6% on unchanged production. The analyst’s target was lowered to $3.80 from $4.00, and the rating downgraded to Underperform from Neutral.

While the analysts cut their FY26-28 New Ackland (thermal coal) production forecast as rail constraints across the West Moreton and Brisbane network are expected to persist, the broker’s cost forecast was lowered after FY25 group unit costs fell -8% year-on-year.

Total Buy ratings in the database comprises 59.03% of the total, versus 32.13% on Neutral/Hold, while Sell ratings account for the remaining 8.85%.

Upgrade

DALRYMPLE BAY INFRASTRUCTURE LIMITED ((DBI)) Upgrade to Accumulate from Hold by Morgans .B/H/S: 2/0/0

Morgans upgraded Dalrymple Bay Infrastructure to Accumulate from Hold following recent share price weakness.

The fall was triggered by the full exit of IPO foundation shareholder Brookfield with the sale of the remaining 26% stake at $4.05/sh. The broker doesn’t see the exit as impacting the business fundamentals.

The stock will enter the S&P/ASX200 index from September 22, the broker reminds.

Next known catalyst is the outcome of the capital allocation review expected in February 2026, along with FY25 results.

No change to forecasts. Target unchanged at $4.73.

EBOS GROUP LIMITED ((EBO)) Upgrade to Neutral from Sell by Citi .B/H/S: 4/1/0

Citi has transferred coverage of Ebos Group to new analyst Laura Sutcliffe.

The broker notes FY25 margins were slightly below its previous estimates, but the company is moving from a derating story to a fairly valued stabilisation play.

The broker sees upside from Animal Care, which provides 5% of revenue but four times EBITDA margins vs the rest of the business. However, this is too small to shift the group profile meaningfully yet. 

Core EBITDA forecast for FY26 is towards the top end of the company’s guidance.

Target cut to $28 from $32. Rating upgraded to Neutral from Sell.

FORTESCUE LIMITED ((FMG)) Upgrade to Neutral from Sell by UBS .B/H/S: 2/2/2

UBS notes trade/war macro risks did not materialise as feared in 2Q2025, and the improved outlook since then supports rotation into miners. 

On a 12-month view, the broker is constructive on commodities with supportive supply dynamics and secular demand drivers, especially copper and aluminium. On gold, the broker is still positive but less so than at the start of 2025.

Coal and nickel have limited downside but no tightness either. In the case of lithium, the outlook is supportive but with wide price dispersion depending on China’s supply scrutiny.

With iron ore, supply remains a potential overhang but over the next 6-12 months, the broker sees US$100/t hold.

The broker lifted Fortescue’s FY26 EPS forecast by 29% and FY27 by 12% following 4-7% upgrades to the iron ore price, and tighter low-grade discounts.

Target rises to $19.40 from $17.90. Rating upgraded to Neutral from Sell.

HOMECO DAILY NEEDS REIT ((HDN)) Upgrade to Buy from Neutral by UBS .B/H/S: 2/3/0

UBS highlights HomeCo Daily Needs REIT trades at a discount to NTA despite an above-sector yield and strong forecasts for FY26-29 earnings growth.

The broker sees potential for re-rating as developments and revaluations drive NTA growth.

A defensive tenant mix (60%) underpins resilience, in the broker’s view, while 40% exposure to large format retail provides upside from improving discretionary macro-environment.

Rating upgraded to Buy from Neutral. Target rises to $1.53 from $1.40.

HARVEY NORMAN HOLDINGS LIMITED ((HVN)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 4/1/0

Morgan Stanley notes the macro tailwinds in Australia have aligned to support discretionary spending, benefiting consumer stocks. Further RBA rate cuts, rising house prices, a low unemployment rate and improved disposable income are all supportive.

The broker sees upside risk to sales growth over the next six months, with risk likely in early 2026, should expectations for RBA cut in February be pushed out. November cut is seen more likely than not.

Rating for Harvey Norman upgraded to Equal-weight from Underweight.

The broker prefers the company to JB Hi-Fi given its broader exposure to housing-related categories like electronics, flooring, bedding and outdoor.

Target rises to $7.60 from $5.40. Industry View: In-Line.

IGO LIMITED ((IGO)) Upgrade to Neutral from Sell by Citi .B/H/S: 2/2/1

IGO Ltd shares are down -19% in the past month, now below Citi’s $4.40 target, cut from $4.50, resulting in an upgrade to Neutral from Sell.

The broker highlights uncertainty over Kwinana, where IGO’s share of losses exceeds -$400m, and over Greenbushes capital expenditure, with first-half 2025 cash flow of around -$100m after -$360m in spend.

FY26 capital expenditure guidance of -$575-675m leaves little clarity beyond FY27, points out the analyst.

Citi maintains Pilbara Minerals ((PLS)) as its lithium preference. 

PRO MEDICUS LIMITED ((PME)) Upgrade to Buy from Sell by Citi .B/H/S: 2/3/0

Citi upgrades Pro Medicus to Buy from Sell with a new target price of $350 from $220. While noting the high trading multiple of 100x-plus on the stock, the analyst considers the compounding effects as outweighing the valuation.

With sticky customers and contracts up to a decade long, alongside high renewal rates and a trend to improve efficiencies in an industry challenged by radiologist constraints, the analyst lifts its revenue growth forecasts to the mid-high 20s% from 20%.

The upgrade has a material impact on the earnings model outer year forecasts and results in a higher target and valuation. Citi’s near-term forecasts align with consensus, while investor confidence should be boosted by the longer-term growth outlook.

AI is also believed to be a “friend” not a “foe” as it integrates third-party AI solution creators, exemplified by its licensing agreement to commercialise a breast cancer detection algorithm. The analyst points to AI as a revenue lever with a high EBIT margin.

Citi has transferred coverage of Pro Medicus to a new analyst.

RURAL FUNDS GROUP ((RFF)) Upgrade to Buy from Neutral by UBS .B/H/S: 2/0/0

UBS notes Rural Funds’ share price has lagged on balance sheet and growth concerns, but with self-funded capex capacity and DPU growth ahead, these pressures are easing.

The stock looks attractive in the broker’s view (trading at -29% discount to NAV) with asset sales as potential near-term catalysts.

Rating upgraded to Buy from Neutral. Target rises to $2.10 from $1.93.

SANTOS LIMITED ((STO)) Upgrade to Buy from Accumulate by Ord Minnett .B/H/S: 4/1/0

Ord Minnett lowers its target for Santos to $8.35 from $8.89 and upgrades to Buy from Accumulate following the collapse of the proposed XRG consortium takeover bid at US$5.626 ($8.48) a share.

The consortium, led by Abu Dhabi’s national oil company with Carlyle and a UAE sovereign fund, withdrew due to regulatory and political hurdles and the lengthy approval timeline, explains the broker.

The consortium had no issues with portfolio valuation or rehabilitation liabilities, notes the analyst, which should support investor confidence.

The broker forecasts Santos will pay an attractive 2025 dividend, rising even further across 2027-30 as new production commences and free cash flow builds. The stock also screens as undervalued on earnings multiples, according to the analyst.

See also STO downgrade.

WESFARMERS LIMITED ((WES)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 0/4/0

Morgan Stanley notes the macro tailwinds in Australia have aligned to support discretionary spending, benefiting consumer stocks. Further RBA rate cuts, rising house prices, a low unemployment rate and improved disposable income are all supportive.

The broker sees upside risk to sales growth over the next six months, with risk likely in early 2026, should expectations for RBA cut in February be pushed out. November cut is seen more likely than not.

Rating for Wesfarmers upgraded to Equal-weight from Underweight to reflect improved outlook for Bunnings and Kmart. The broker reckons margin expansion is capped by the elevated cost of doing business.

Target rises to $93.50 from $70.70. Industry View: In-Line.

Downgrade

AUDINATE GROUP LIMITED ((AD8)) Downgrade to Equal-weight from Overweight by Morgan Stanley .B/H/S: 1/2/1

Morgan Stanley admits it misjudged the business cycle for Audinate Group, and the company now needs to deliver tangible proof (show-me) to be re-rated.

The broker still believes the long-term potential remains attractive, but FY26 brings higher opex, peak cash burn, and limited catalysts.

FY26 EBITDA forecast downgraded to -$5.4m loss from $4.2m, and FY27 lowered to -$1.2m loss from $11.3m.

Target cut sharply to $5 from $11. Rating downgraded to Equal-weight from Overweight.

Industry View: In-Line.

AMP LIMITED ((AMP)) Downgrade to Accumulate from Buy by Ord Minnett .B/H/S: 3/2/0

AMP has agreed to settle a class action on superannuation fees and interest rates for $122m, with AMP paying -$75m and insurers covering the balance.

Ord Minnett highlights AMP has already received $44m from insurers for remediation coverage, while discussions with others continue.

The broker views this settlement as the most significant of AMP’s legal issues and considers the outcome better than expected on both cost and timing. Four smaller cases remain but are likely to be spread over several years.

The focus now shifts to capital management, suggests Ord Minnett, noting potential excess capital of nearly $300m by end-2025, equivalent to around 10c per share.

Ord Minnett makes no changes to earnings forecasts, retains a $1.95 target price, and downgrades its rating to Accumulate from Buy following recent share price gains.

BUBS AUSTRALIA LIMITED ((BUB)) Downgrade to Accumulate from Buy by Ord Minnett .B/H/S: 2/1/0

Ord Minnett lowers its target for Bubs Australia to 18c from 20c on a higher assumed weighted average cost of capital (WACC) of 12.3% and downgrades to Accumulate from Buy.

The company delivered its first ever profit in FY25 of $5.5m after a FY24 loss of -$21m, yet the broker highlights renewed boardroom instability.

The immediate resignation of the Chair follows the earlier removal of the turnaround CEO, unsettling governance despite the appointment of well-credentialled replacements, explains the broker.

Positively, earnings growth potential remains supported by strong product margins above 40% and first-mover advantage in the US goat infant formula market, highlights Ord Minnett.

CENTURIA CAPITAL GROUP ((CNI)) Downgrade to Sell from Neutral by UBS .B/H/S: 3/0/2

UBS notes Centuria Capital has higher gearing and a more constrained capital position relative to peers. Moreover, the shares re-rated quickly post-FY25 result, limiting upside.

While lower rates are expected to support the business model, the broker reckons retail investor demand for new fund products could lag peers.

Rating downgraded to Sell from Neutral. Target unchanged at $2.10.

CENTURIA OFFICE REIT ((COF)) Downgrade to Sell from Neutral by UBS .B/H/S: 0/1/3

UBS expects Centuria Office REIT’s priority to be on gearing reduction, which will see limited distribution growth. Cash flow is expected to be under pressure from FY25-26 downtime and leasing headwinds.

The broker believes the payout ratio is too high with DPS higher than AFFO, which will require distribution growth to be lower than earnings over time.

Rating downgraded to Sell from Neutral. Target unchanged at $1.20.

COCHLEAR LIMITED ((COH)) Downgrade to Neutral from Buy by Citi .B/H/S: 1/3/1

Citi downgrades Cochlear to Neutral from Buy as the company launches its new implant, the Nucleus Nexa, and lowers the target to $320 from $350.

With a transfer of analyst coverage, CSL ((CSL)), Telix Pharmaceuticals ((TLX)), and ResMed ((RMD)) are the top stock picks in the healthcare sector, with the analyst preferring drugs and devices over services and providers due to better pricing power. The exception is Pro Medicus ((PME)).

The analyst likes the new “smart” implant Nucleus Nexa but believes the double-digit growth will be weighted to 2H26, with recent patient history showing a hesitance to upgrade due to satisfaction with existing products and affordability.

Citi views Cochlear as a high-quality company and would like to see evidence that the product can succeed despite cost-of-living inflation pressures.

MAGELLAN FINANCIAL GROUP LIMITED ((MFG)) Downgrade to Underperform from Neutral by Macquarie .B/H/S: 0/2/2

Macquarie downgrades Magellan Financial to Underperform from Neutral with a transfer of analyst coverage, and considers there to be downside risks to consensus FY26 earnings forecasts with the analyst’s EPS estimates below the market by circa -7%.

The lower expectations are attributed to weaker associate profits, higher sub-advisory fees, and lower distribution income, with increased risks to a pick-up in net outflows with the departure of the Infrastructure portfolio manager, fund rating reviews, and relative performance.

Macquarie lowers its earnings forecasts by -0.4% for FY26 and -5.6% for FY27. Target price rises to $8.65 from $8.37 due to a change in valuation ascribed.

MINERAL RESOURCES LIMITED ((MIN)) Downgrade to Neutral from Buy by UBS .B/H/S: 2/2/2

UBS notes trade/war macro risks did not materialise as feared in 2Q2025, and the improved outlook since then supports rotation into miners. 

On a 12-month view, the broker is constructive on commodities with supportive supply dynamics and secular demand drivers, especially copper and aluminium. On gold, the broker is still positive but less so than at the start of 2025.

Coal and nickel have limited downside but no tightness either. In the case of lithium, the outlook is supportive but with wide price dispersion depending on China’s supply scrutiny.

With iron ore, supply remains a potential overhang but over the next 6-12 months, the broker sees US$100/t hold.

The broker lifted FY26 EPS forecast for Mineral Resources by 42% and FY27 by 26% on iron ore price upgraded and improved low-grade discounts. 

Target rises to $43.20 from $40.40. Rating downgraded to Neutral from Buy on valuation grounds.

NEW HOPE CORPORATION LIMITED ((NHC)) Downgrade to Underperform from Neutral by Macquarie .B/H/S: 1/2/1

New Hope’s FY25 underlying net profit was in line with Macquarie’s forecast. Operating cash flow met the broker’s estimate but free cash flow beat by 10%, while capex was -8% lower.

The disappointment was in the outlook, with the growth path presented by the company suggesting lower-than-expected coal production in FY26. 

The broker cut FY26 production forecast by -8%, resulting in a -2% cut to EBITDA forecast. FY27 production forecast was left unchanged but EBITDA saw a 6% upgrade.

Target cut to $3.80 from $4.00 as the broker also incorporated lower valuation for Malabar. Rating downgraded to Underperform from Neutral.

NORTHERN MINERALS LIMITED ((NTU)) Downgrade to Hold from Speculative Buy by Ord Minnett .B/H/S: 0/1/0

Northern Minerals published a definitive feasibility study (DFS) for the Wolverine project, which outlined an 11-year open-pit/underground operation producing 17.5ktpa xenotime concentrate,

Ord Minnett notes the base case net present value at -8% discount of $74m was softer than expected and low relative to the company’s $326m market cap.

The broker revised its model to include DFS assumptions plus upside from Gambit and Dazzler deposits.

Target trimmed to 3.6c from 4c. Rating downgraded to Hold from Speculative Buy.

ORA BANDA MINING LIMITED ((OBM)) Downgrade to Underperform from Outperform by Macquarie .B/H/S: 1/0/1

Ora Banda Mining is downgraded by Macquarie to Underperform from Outperform with an unchanged target of 95c post the updated resource and reserve growth update.

The miner’s annual R&R statement showed resources up 8% to 2.1Moz and ore reserves up 24% to 236koz (net of depletion), with an underground reserve of around 1.7mt at 3.3g/t for 176koz.

The bulk of the reserve is from Sand King, the analyst highlights, rising 54% to 84koz, and Riverina up 5% to 92koz.

Further growth is flagged from the sizeable exploration program over FY26, which is expected to boost resource/reserves.

Macquarie trims production estimates from lower Riverina grades and reduces FY26 EPS estimate by -9%.

PALADIN ENERGY LIMITED ((PDN)) Downgrade to Hold from Accumulate by Ord Minnett .B/H/S: 5/2/0

Post Paladin Energy’s $320m equity capital raising to fund its Patterson Lake South project through to the final investment decision and potential Canadian approval in FY27, Ord Minnett downgrades the stock to Hold from Accumulate. Target moves to $7.60 from $7.70.

Management is aiming for final investment decision and approvals by FY27, and the raise is above the previously highlighted capex of -US$1.23b on pre-production for Patterson.

Some $120m will be used to boost working capital at Langer Heinrich and lifts Paladin’s cash position to US$194m in FY26, as lower grade inventory had eroded cash flow and was placing pressure on cash burn.

At current levels post the 20% rally since late August, the stock is looking fully valued, the report suggests, hence the downgrade.

REGIS RESOURCES LIMITED ((RRL)) Downgrade to Sell from Neutral by UBS .B/H/S: 2/2/3

As the US Federal Reserve cuts interest rates, UBS raises its short to medium-term gold price forecasts by 9-12% across FY26-28 to US$3,825, US$3,650, and US$3,350/oz, respectively, with a peak price of US$3,900/oz in 3Q26. The broker’s long-term estimate is kept at US$2,800/oz.

These forecast price changes result in EPS upgrades across the broker’s coverage of gold stocks of 18-29% in FY26/ and FY27and target prices between 6-25% higher. 

The analysts see more opportunity in mid-cap, growth names such as Genesis Minerals ((GMD)), Perseus Mining ((PRU)), and Vault Minerals ((VAU)).

Due to recent share price momentum, UBS downgrades Regis Resources to Sell from Neutral. Target rises to $5.40 from $4.55.

SANTOS LIMITED ((STO)) Downgrade to Trim from Accumulate by Morgans .B/H/S: 4/1/0

Morgans notes the ADNOC-led consortium withdrew the takeover proposal for Santos, marking the third failed approach since 2018. The broker believes it has damaged the case for a corporate premium and created near-term selling pressure as arbitrage investors exit.

The broker highlights a newspaper report suggesting the consortium blamed “commercial factors” found during its assessment. In the broker’s view, this could relate to findings during due diligence and/or negotiations.

Separately, the broker finds it impossible to have a view on speculation of a renewed push to break up the company’s business and ADNOC’s possible interest in this.

Target cut to $7.20 from $8.65 after trimming out corporate premium. Rating downgraded to Trim from Accumulate.

See also STO upgrade.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup <img alt="3dbar" src="https://www.fnarena.com/charts/fnarena/3dbar.php?mydata=1&mylabels=BellPotter,Citi,Macquarie,MorganStanley,Morgans,OrdMinnett,ShawandPartners,UBS&b0=203,140,159,102,244,246,172,131&h0=128,144,176,111,168,147,30,177&s0=12,26,49,49,37,33,4,33″ style=”border:1px solid #000000″>

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