Weekly Reports | 11:00 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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29METALS LIMITED ((29M)) Upgrade to Hold from Sell by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity upgrades 29Metals to Hold from Sell with a $0.25 price target following a first-quarter update.
Copper production was stronger than expected, although zinc output was materially constrained by restricted access at the Xantho Extended orebody.
Net cash improved following the recent capital raising, but higher operating costs weighed on the quarter.
Future value is tied to securing regulatory approval for the TSF3 tailings facility, which is required before operations can restart at Capricorn Copper.
Forecasts have been revised higher following the update, although the broker views the stock as trading close to fair value.
BEACH ENERGY LIMITED ((BPT)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Beach Energy's March quarter production was impacted by downtime in Taranaki, weak demand in Otway, flooding in the Cooper Basin and a slower-than-expected ramp-up at Waitsia, Canaccord Genuity explains.
Production of 4.8MMboe rose qoq but missed expectations, prompting a downgrade to FY26 guidance. Stronger oil prices helped offset weaker gas sales, resulting in only a modest revenue 'miss', the analyst observes.
Despite near-term headwinds, the broker retains its FY26 production forecast and sees upside from improving LNG pricing and ongoing project execution.
Canaccord maintains a Buy rating and raises its target to $1.43 from $1.35.
COMPUTERSHARE LIMITED ((CPU)) Upgrade to Neutral from Underweight by Jarden.B/H/S: 0/0/0
Jarden upgrades Computershare to a Neutral rating from Underweight while maintaining a $31.00 target price.
The report highlights a newly announced partnership with Securitize that materially blunts the worst-case disintermediation risk associated with tokenised shares.
The agreement allows Computershare to act as the transfer agent for Issuer-Sponsored Tokens, addressing its lack of digital-native infrastructure while giving it a direct response to the NYSE's open transfer agent program.
While the structural thesis remains unresolved until the economic sharing details are disclosed, the broker suggests the binary risk has been removed and the stock's current de-rating adequately captures ongoing structural pressures within Issuer Services.
Earnings estimates are unchanged and sit roughly 2% above management's guidance, reflecting the positive impact of higher short-term interest rates on margin income.
NINE ENTERTAINMENT CO. HOLDINGS LIMITED ((NEC)) Upgrade to Buy from Overweight by Jarden.B/H/S: 0/0/0
Jarden upgrades Nine Entertainment to a Buy rating from Overweight and lowers the target price to $1.15 from $1.30.
The broker lifts FY26 earnings per share forecasts to 8.8c from 7.9c after pulling forward the earnings contribution of the recently completed QMS acquisition into the final quarter.
This near-term earnings boost is offset by a soft fourth-quarter television advertising outlook and rising fuel prices inflating publishing distribution costs.
Outer year earnings estimates are trimmed slightly, reducing to 9.4c from 9.5c in FY27, while the target price reduction primarily reflects a higher risk-free rate assumption and conservative publishing valuations.
The upgrade is driven by "compelling valuation support", with the report noting potential un-priced upside from future licensing agreements under the News Media Bargaining Code.
SMARTGROUP CORPORATION LIMITED ((SIQ)) Upgrade to Buy from Hold by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity raises its target price for Smartgroup Corp by $1.00 to $10.10 and upgrades to Buy from Hold, highlighting near-term earnings momentum and potential upside from execution of strategic initiatives.
A strong operating backdrop driven by EV-related tax incentives and higher fuel prices is noted, supporting elevated demand for novated leases.
The broker expects FY26 to benefit from increased lease volumes and a higher mix of new leases, which are more profitable, alongside internal improvements in digitisation and customer service.
Demand is expected to moderate as fuel prices normalise and policy settings evolve.
WOODSIDE ENERGY GROUP LIMITED ((WDS)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden has upgraded Woodside Energy to an Overweight rating, with the target price moving to $36.50 from $37.00, following the March quarter report.
Operational performance was strong, with production exceeding expectations, supported by high reliability across key assets.
This was offset by an expanded oil hedging position at below-market prices, which is expected to weigh on near-term earnings.
Management has initiated a broader business review aimed at improving efficiency, with potential asset sales under consideration.
Forecasts have been revised to reflect the updated outlook.
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COLES GROUP LIMITED ((COL)) Downgrade to Neutral from Overweight by Jarden.B/H/S: 0/0/0
Jarden has downgraded Coles Group to Neutral from Overweight following a period of relative share price outperformance, while concurrently lifting its target price to $22.60 from $21.60.
Commentary states the third-quarter update revealed a robust performance in food, with sales growing 4% supported by disciplined cost control, easing theft, and strong online momentum.
Conversely, the liquor division underperformed significantly, exiting the period with sales down more than -5% as lower foot traffic and heightened discounting weighed on margins.
Jarden has maintained its near-term earnings forecasts but modestly trimmed outer-year expectations, noting the supermarket giant's discount to rival Woolworths ((WOW)) has narrowed back to historical averages.
Ultimately, the broker believes Coles is well-positioned structurally, but sees more compelling near-term upside elsewhere in the consumer discretionary sector.
FLIGHT CENTRE TRAVEL GROUP LIMITED ((FLT)) Downgrade to Overweight from Buy by Jarden.B/H/S: 0/0/0
Jarden downgrades Flight Centre Travel Group Limited to an Overweight rating from Buy and nudges the target price up to $16.80 following a "solid" third-quarter update.
The broker notes the company reiterated guidance despite the negative impact of the Middle East conflict, which created a roughly -$10m hit to the Leisure division in April.
Confidence to maintain full-year targets was driven by a strong Q3 performance, highlighted by a 19% year-on-year lift in pre-tax profit and a 29% surge in Corporate pre-tax profit.
Jarden lifts its FY26 profit before tax estimate to $316m—the lower end of management's guidance—implying flat fourth-quarter earnings as weaker Leisure demand offsets ongoing Corporate strength.
Earnings per share forecasts inch up to 98.2c from 97.5c in FY26, and to 124.4c from 124.3c in FY27, while the report highlights the recent US$6.3bn takeover offer for American Express Global Business Travel implies the Leisure division is currently trading at less than 2x EBITDA.
PEXA GROUP LIMITED ((PXA)) Downgrade to Underweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden downgrades Pexa Group to an Underweight rating and reduces the target price to $11.35 from $12.40 despite a solid third-quarter update.
The broker believes the significant downside risk associated with the impending IPART pricing review is not accurately reflected in the current share price.
While the company's FY26 earnings are tracking toward the top end of guidance supported by a 7.3% year-on-year increase in Australian transaction volumes, Jarden estimates the regulatory asset base (RAB) would need to be roughly $600m to justify current valuations.
The broker's analysis suggests a base RAB of just $209m, creating a material -$400m gap that is unlikely to be bridged by unrecovered costs or international expansion.
The report notes that near-term downside risk from the draft IPART report, expected in June, will likely overshadow any potential upside from the UK operations or AML initiatives.
WESTPAC BANKING CORPORATION ((WBC)) Downgrade to Sell from Underweight by Jarden.B/H/S: 0/0/0
Jarden downgrades Westpac to a Sell rating from Underweight and lowers the target price to $31.00 from $32.00 after a half-year result that highlighted emerging vulnerabilities in the bank's deposit franchise, on the broker's assessment.
Jarden notes net interest margins fell -7bps half-on-half to 1.89%, primarily driven by the changing dynamics of the deposit market, with 12% of Westpac's deposit base currently sitting in non-interest-bearing accounts.
While the bank delivered robust institutional and business loan growth over the past two years, core profits have remained flat as investments in tech simplifications like the Unite project continue to absorb capital.
The report questions the timing of this accelerated growth strategy given the potential for a credit cycle downturn catalysed by domestic fragility and Middle East tensions, reflected in a 155% half-on-half spike in bad debts to $443m.
Jarden cuts FY26 and FY27 cash earnings forecasts by -4% and -1%, respectively.
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