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 October 27 to Friday October 31, 2025
Total Upgrades: 9
Total Downgrades: 14
Net Ratings Breakdown: Buy 60.53%; Hold 30.79%; Sell 8.68%
For the week ending Friday, October 31, 2025, FNArena tracked nine upgrades and fourteen downgrades for ASX-listed companies from brokers monitored daily.
Average target price increases outpaced cuts for the seventeenth consecutive week, while falls in average forecasts by analysts exceeded rises. Stocks in the Resources sector accounted for the majority of target price changes (both up and down) as well as for rises in earnings forecasts.
Furniture retailer Nick Scali heads up the positive change to target table below following its AGM trading update. In the words of Chairman John Ingram, the company is displaying strong progress in advancing its UK strategy as well as delivering solid results across the A&NZ region.
Macquarie noted strong same store written sales orders in A&NZ, up 11% year-to-date in the first half.
Weaker updates from furnishing peers such as Adairs and Beacon Lighting suggest to the analyst Nick Scali is gaining market share in its core Australian business.
Robust profit guidance for A&NZ of between $39-40m also indicates to the broker the performance was not reliant on heavy discounting or promotional activity.
Citi raised its FY27 and FY28 profit forecasts by 2% and 4%, respectively, reflecting stronger sales momentum in A&NZ and growing confidence the UK operations are on track to reach breakeven.
The UK business reported a 10% year-on-year rise in written sales orders. All Fabb stores are expected to be converted to the Nick Scali format by December, with 14 of 20 already completed. Gross margins have improved markedly, noted Ord Minnett, rising to 58.3% in the quarter from 41% at the time of acquisition.
This Sell-rated broker is more dubious on the prospects of the UK division than the wider market. It’s noted UK sales of $7.6m in August and September imply annualised sales of around $51m, below the company’s guided breakeven level of $53m, which assumes minimal promotional spend.
While sales per store are rising, Nick Scali may need to allocate -5-8% of sales to marketing to sustain this growth, Ord Minnett suggested, likely pushing the breakeven threshold further above $53m.
Lithium miner Pilbara Minerals and Chalice Mining (developing a deposit containing palladium, platinum group elements, nickel, copper, and cobalt) are next on the target price table with average rises of 16% and 13%, respectively.
Pilbara and Chalice also fill positions one and two on the week's list for positive change to average earnings forecast. Chalice’s position on these tables should be ignored due to a data entry glitch.
The Pilbara Minerals’ share price has risen 45% year to date compared a 10% rise in spodumene prices and 4% for Chinese lithium carbonate prices.
Broker views on the company’s "impressive" September quarter operational report and the impact of a volatile lithium market environment are detailed at https://fnarena.com/index.php/2025/10/28/valuation-vs-sentiment-for-pilbara-minerals/
Metallurgical coal exposure Coranado Global Resources is next with a rise in average target price of just over 11% following its September quarter operational report showing a 'beat' on production at all three mines (Curragh, Buchanan, and Logan), while mining costs were in line with Macquarie’s expectations.
Run-of-mine (ROM) coal production/saleable coal production were beats of 8% and 5%, respectively against the analyst’s forecasts though sales missed by -8% due to shipping congestion in Australia and US vessel scheduling issues.
Coronado’s near-term operational performance should improve, in Ord Minnett’s opinion, as production ramps-up at Mammoth underground (Curragh) and due to the Buchanan expansion project.
On the flipside, two industrial exposures, Vista International and CSL, received the largest falls in average broker targets of -11% and -10%, respectively.
Vertically integrated cinema software provider Vista is uniquely positioned with a defensible market presence and a highly sticky customer base, according to Ord Minnett, which last week initiated research coverage with a Buy rating.
The broker set a $3.22 price target, which had the effect of dragging down the average target of now four daily monitored brokers in the FNArena database.
Vista’s cloud transition is expected to double revenue and expand margins by 1,820bps by 2030, and the analysts see further upside via payments integration and platform expansion.
On Ord Minnett’s assessment valuation remains undemanding, with the market seen as overly focused on short-term cash flow rather than long-term earnings leverage.
The CSL share price resumed its downward trajectory last week after management yet again downgraded FY26 profit growth guidance largely because declining US influenza vaccination rates are pressuring the Seqirus business.
Management will also delay its previously announced strategy to de-merge Seqirus in FY26 via a separate listing on the ASX, until US influenza vaccine market conditions improve.
For a summary of broker views, which did include positives, see https://fnarena.com/index.php/2025/10/31/anti-vaxxers-china-cloud-csls-future/
Regarding rises in average earnings forecasts by brokers, here the two largest Industrial sector beneficiaries were Helloworld Travel and Viva Energy.
Morgans and Ord Minnett updated their forecasts for a trading update at Helloworld’s AGM the prior week, where management upgraded FY26 earnings guidance.
Morgans attributed the upgrade to both organic growth and recent acquisitions, including the remaining 50% purchase of Gold Coast-based remote travel agency Mobile Travel Holdings. Strong forward bookings were also highlighted, with FY26 air departures up 11%.
Ord Minnett noted an ongoing solid financial position for Helloworld, forecasting FY26 net cash of around $39m and no debt. The company’s $58m stake in Webjet Group is also seen as providing strategic flexibility.
This broker found Viva Energy’s September quarter update was mixed. Ongoing weakness was noted across the Convenience & Mobility and Commercial & Industrial segments, offset by a strong result from the Geelong refinery.
Macquarie attributed the refinery performance to higher utilisation and GRM (gross refining margin) due to an efficient RCCU (residual catalytic cracking unit) turnaround. Full refinery optimisation is expected mid-November with the ULSG (ultra-low sulphur gasoline) unit.
UBS highlighted the Convenience & Mobility segment experienced a 3.5% improvement in gross margin, aided by better product mix and pricing. Additionally, $35m in synergies and $80m in group-wide cost savings are thought to remain on track.
Mineral Resources is next with a 9% rise in average earnings forecast. Both Morgan Stanley and Bell Potter described the company’s September quarter as "exceptionally strong".
Production outperformed expectations across all sites, noted Macquarie, with the Pilbara Hub up 15% versus consensus, Onslow 5%, Mt Marion 14%, and Wodgina 50%. The latter was considered the main surprise and maintaining this improvement is seen as key.
While management is executing well, Morgans felt most of the upside stemming from this is already priced into the (rallying) share price. Growth in mining services is also forecast to be more muted.
Nufarm received the largest fall in average earnings forecasts solely due to an update by Macquarie.
Ahead of the company’s FY25 results on November 19, the broker cut its FY25 EPS forecast by -41% on higher interest and depreciation assumptions, while lifting FY26 estimates by 1%.
Macquarie lowered its target price to $2.55 from $3.08 and retains a Neutral rating, citing weaker AgChem peer multiples and the likely write-down of the company’s Seeds portfolio value.
Nufarm is followed on the earnings downgrade table by nine Resource sector stocks; all are impacted by September quarter reporting. Lithium exposures IGO Ltd and Liontown Resources received the largest downgrades from brokers.
What started with weak FY26 production guidance in August has been followed up with a weak performance by IGO in the September quarter, UBS noted, which proceeded to downgrade its rating to Sell from Neutral.
Production and sales missed expectations at Greenbushes and Nova, noted Macquarie, but this analyst also noted the Chemical Grade Plant 3, a major spodumene concentrate processing facility under construction at Greenbushes, remains on track and stockpiles provide flexibility into a stronger near-term lithium market.
Realised pricing was the main disappointment at Liontown Resources, Ord Minnett commented, driving shares down despite stronger production and shipments.
Bell Potter anticipated stronger quarters ahead as higher-grade underground ore replaces open-pit material, improving recoveries and product grade.
Whitehaven Coal’s September quarter was softer than expected by UBS due to weather disruptions and mine sequencing issues.
Ramelius Resources’ quarterly was impacted by a one-year delay to the Rebecca project to prioritise the Mt Magnet mill expansion, explained Macquarie.
The same broker noted Lynas Rare Earths missed on revenue expectation due to weaker realised prices, which were -21% lower-than-expected by the analyst.
Returning to positive outcomes, here Sandfire Resources appears in the tables below for positive target and earnings forecast changes following first quarter results showing progress at Motheo and Matsa. For greater detail see https://fnarena.com/index.php/2025/10/29/how-much-sandfire-premium-is-justified/
Total Buy ratings in the database comprises 60.53% of the total, versus 30.79% on Neutral/Hold, while Sell ratings account for the remaining 8.68%.
Upgrade
A2 MILK COMPANY LIMITED ((A2M)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 4/3/0
Morgan Stanley upgrades a2 Milk Co to Overweight from Equal-weight with a higher target price of $10 from $8.10, as the analyst revisits the stock coverage in the food and beverage sector.
a2 Milk's acquisition of the Pokeno blending and canning facility is considered "transformative" and offers the broker greater confidence in top-line growth for an increased portfolio of China label products.
The vertical integration into manufacturing brings forth margin benefits and diversifies the risk away from Synlait ((SM1)), its manufacturing partner.
Morgan Stanley lifts its earnings estimates by around 7% for FY27/FY28.
Industry View: In-Line.
AUSTAL LIMITED ((ASB)) Upgrade to Outperform from Neutral by Macquarie .B/H/S: 1/2/0
Austal's FY26 EBIT guidance of $135m provided at the AGM was 4% above consensus and Macquarie's forecasts, implying 19% y/y growth. Adjusting for the MMF3 submarine contract, the underlying EBIT growth forecast is around 4%.
The broker points to the company's guidance upgrade sequence for FY25, which went from $80m at AGM, to not less than $80m at 1H25 result and to not less than $100m just before the FY25 result.
TATS program settlement was completed, with US$92m cash received and no further earnings impact expected.
For context, the TATS issue was about cost and schedule pressures from design delays in the shipbuilding contract with the US Navy, which, following resolution, frees the company to focus on more profitable work.
The broker lifted FY26 EBIT forecast to around $134m from $130m following the guidance. FY26 EPS forecast upgraded by 4% and FY27 by 2%.
Target rises to $8.10 from $7.95. Rating upgraded to Outperform from Neutral.
CAPRICORN METALS LIMITED ((CMM)) Upgrade to Neutral from Underperform by Macquarie .B/H/S: 2/1/0
Macquarie upgrades Capricorn Metals to Neutral from Underperform, with a $13 target retained, as the 1Q26 report was pre-announced with few surprises.
The miner produced around 32koz, or circa 27% of the FY26 midpoint of guidance, which management retained.
All-in-sustaining costs were better than expected by 5% versus consensus, but sales fell and missed the analyst's forecast by -11% and consensus by -13%.
Cash also came in lower by -3% versus the broker's estimate and -6% below consensus, attributed to lower sales.
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