Weekly Reports | 11:15 AM
A summary of the highlights from Broker Call Extra updates throughout the week past.
Broker Rating Changes (Post Thursday Last Week)
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AUSSIE BROADBAND LIMITED ((ABB)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden raises its target for Aussie Broadband to $5.80 from $5.30 and upgrades to Overweight from Neutral.
The broker raises its per-unit earnings (EBITDA) assumptions for the More & Tangerine (M&T) contract by 10% annually. This raises Jarden's terminal-year (FY32) EBITDA contribution to around $32.8m from $19.8m and drives a 6% EPS upgrade by FY32.
The broker notes residential remains the key long-term driver, with Aussie's brand strength and premium pricing sustaining attractive economics. By FY32, around 4.8 M&T customers are expected to generate the same incremental earnings as one residential subscriber.
The analysts caution risks include weaker residential growth, competition from alternate technologies such as fixed wireless access, and greater price competition.
NETWEALTH GROUP LIMITED ((NWL)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden notes Netwealth Group's share price fell -10% since FY25 results on ASIC’s investigation into failed funds First Guardian and Shield, but risks appear more moderate given it cut off First Guardian flows earlier than peers.
The broker highlights past ASIC cases imply potential penalties of -$40m, which is around 21% of the FY26 earnings estimate. However, exposure is contained by the company's low super dependence, strong product offering, and margin flexibility.
Overall, the broker reckons the company has the capacity to absorb any costs within the FY26 cost forecast, and in fact, further out, it could benefit from flows from sub-scale platforms that may struggle to meet growing trustee demands.
FY26-27 earnings forecasts trimmed by -1-2% on higher cost growth. Target cut to $34.00 from $34.60.
Rating upgraded to Overweight from Neutral.
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SANTOS LIMITED ((STO)) Downgrade to Underweight from Overweight by Jarden.B/H/S: 0/0/0
Jarden lowers its target for Santos to $7.05 from $8.40 and downgrades to Underweight from Overweight after ADNOC’s XRG consortium withdrew its indicative US$5.63/share (circa $8.42) takeover offer.
Santos had been trading at a discount, closing at $7.65 on September 17, but the broker’s underlying valuation is $7.05 at US$70/bbl Brent, or $6.39 at US$65/bbl.
The analysts explain the consortium cited a mix of commercial factors and terms in the Scheme Implementation Agreement as reasons for pulling out. Market disappointment is expected, with investors likely to question management’s negotiation strategy.
The broker expects management to emphasise upcoming catalysts including first gas from Barossa LNG by late September and the accelerated timeline at Pikka in Alaska.
All in all, it's thought shareholders will be left bruised by the collapse of the deal.
VAULT MINERALS LIMITED ((VAU)) Downgrade to Hold from Buy by Moelis and Downgrade to Neutral from Buy by Jarden.B/H/S: 0/0/0
Vault Minerals’ FY26 guidance is for gold production of 332-360koz, costs (AISC) of between -$2,650-2,850/oz, and capex of -$278m, all slightly softer than Moelis' prior assumptions.
Exploration spend of -$30m was also higher than expected. FY27 and FY28 production guidance of 360-390koz and 370-400koz, respectively, provides scope for upside relative to consensus, highlight the analysts.
The broker adjusts its forecasts to align with midpoints of production and cost guidance, with near-term impacts at Deflector and stronger medium-term volumes across the portfolio.
While Moelis downgrades its rating to Hold from Buy, citing the recent rally in the share price which has eroded valuation upside, the target price is raised to 69c from 67c.
The broker notes a spot price scenario could justify valuation of around 90c, with FY27 trading on an 18.7% free cash flow (FCF) yield and forecast cash of around $1.5bn, leaving Vault among its preferred gold exposures.
Jarden lowers its target for Vault Minerals to 49c from 51c after allowing for management's three-year targets and downgrades to Neutral from Buy given the recent strong share price.
FY26 production guidance of 332-360koz came in below consensus, with weaker output at Deflector during its owner-operator transition, while Mount Monger and King of the Hills are steady, explains the broker.
The analysts explain group costs (AISC) of -$2,650-2,850/oz reflect lower production and transition costs at Deflector, plus higher expensed mining at Mount Monger. It's also noted Leonora also faces higher material movement costs offset by inventory credits.
Growth capex falls around -10% year-on-year, though Deflector’s -$48m is above consensus due to new underground equipment, notes Jarden. Production is expected to recover in FY27-28 via King of the Hills and Sugar Zone.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | AUSSIE BROADBAND LIMITED | Buy | Neutral | Jarden | |
| 2 | NETWEALTH GROUP LIMITED | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 3 | SANTOS LIMITED | Sell | Buy | Jarden | |
| 4 | VAULT MINERALS LIMITED | Neutral | Buy | Moelis | |
| 5 | VAULT MINERALS LIMITED | Neutral | Buy | Jarden | |
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