Weekly Reports | 10:30 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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COLES GROUP LIMITED ((COL)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Coles Group's 1H26 result was in line, with earnings 3% ahead of Jarden, with cash-realisation up, margins up, and progress on key strategic initiatives. The focus, however, was on the outlook, with the sustainability of margin in question.
There was also a weaker trading update. Jarden's industry discussions suggest Coles is still gaining share, with exit rates stronger, improving trends in non-food and growth in online supportive of a strong second half. The key risk the broker sees is liquor.
Upgrade to Overweight from Neutral, target falls to $21.60 from $23.00.
CLEANAWAY WASTE MANAGEMENT LIMITED ((CWY)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Cleanaway Waste Management delivered 1H26 underlying earnings 2.8% ahead of consensus. Importantly, notes Jarden, and for the first time in some time, this equated to stronger core profit and earnings, which were also ahead of consensus.
Positively for the broker, Solid Waste operating performance was strong. On the opposite side, free cash flow generation softened compared to 1H25, earnings cash conversion was soft and 'one-offs' once again featured prominently in the disclosure materials.
Commentary highlights Cleanaway's earnings guidance has consistently been for a 2H26 skew.
Solid Waste will likely remain strong, Jarden suggests, Health Services should recover, Contract Resources is reportedly delivering ahead of expectations and the safety investment required is within the -$400m capex guidance.
Upgrade to Buy from Overweight. Target rises to $3.10 from $3.00.
IDP EDUCATION LIMITED ((IEL)) Overweight by Jarden.B/H/S: 0/0/0
After consistent earnings downgrades over the past couple of years, it is a welcome sight to see IDP Education's FY26 guidance upgraded 4% at the midpoint, Jarden comments.
However, guidance implies a -25% downgrade to previous 2H26 earnings assumptions.
Jarden remains cautious on the wider volumes recovery, with momentum in the UK and Canada worse than anticipated.
The broker does expect volumes to recover in the long term, with further upside possible if the company is able to execute in China, New Zealand and Ireland.
Target falls to $6.00 from $6.40, Overweight retained.
REECE LIMITED ((REH)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden estimates mature US stores operated at an EBIT margin of 5.4% through the first half for Reece and, with store openings expected to moderate from the second half, the first represents a "peak drag" on reported margins. Rating is upgraded to Overweight from Neutral.
The broker's forecasts incorporate a modest volume recovery from the first half in FY27 with US EBIT margins reaching 5.7% from FY30. Target is revised up to $16.40 from $13.90 and EPS estimates are increased by 4.8% for FY26 and 3.6% for FY27.
VAULT MINERALS LIMITED ((VAU)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Vault Minerals delivered H1 underlying EBITDA of $385m that substantially beat Canaccord Genuity's estimates.
FY26 guidance has been maintained with production of 332-360,000 ounces at AISC of $2650-2850/oz. A maiden interim unfranked dividend of seven cents was declared.
The broker updates its modelling and upgrades the rating to Buy from Hold. Target is steady at $6.45.
VIRGIN AUSTRALIA HOLDINGS LIMITED ((VGN)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Jarden was impressed with the first half result from Virgin Australia amid lower depreciation and with the timing of capital expenditure skewed more heavily to the second half.
Commentary identifies the highlight in the strong RASK performance, largely driven by yield improvements.
The outlook appears to offer more of the same, with the broker noting execution is running to plan.
Given the recent pull back in the share price since initiating coverage, Jarden upgrades to Buy from Overweight while keeping its target at $4.
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