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)
Upgrade
TECHNOLOGY ONE LIMITED ((TNE)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0
Jarden upgrades TechnologyOne to an Overweight rating from Neutral with its target price increased to $31.00 from $30.00 following the release of half-year results.
First-half revenue grew 12% to $318m, missing consensus estimates by -4% due to the timing of contract wins.
Earnings before interest, tax, depreciation and amortisation met expectations, rising 12% to $131m, alongside a 9% increase in profit before tax to $89m.
Full-year guidance was maintained in anticipation of a strong second-half skew, leaving FY26 earnings per share estimates virtually unchanged.
The broker expects profit before tax growth could accelerate from the guided 18% to 20% range in FY26 to approximately 30% in FY27, underpinning the rating upgrade.
Downgrade
ELDERS LIMITED ((ELD)) Downgrade to Hold from Buy by Canaccord Genuity.B/H/S: 0/0/0
Canaccord Genuity downgrades Elders to a Hold rating from Buy and lowers its target price to $5.34 from $8.64 following a disappointing first-half result.
While group gross profit of $397m beat estimates by 7%, operating costs surged 25% on the prior corresponding period to -$276m.
The significant cost escalation is primarily attributed to the ongoing information technology system modernisation program, entirely overshadowing improved cash conversion and an initial five-month contribution from the Delta Agribusiness acquisition.
Sudden trajectory changes in operating expenses reduce forecasting confidence, prompting the broker to lower earnings per share estimates by -11% to -16% over the next three years.
The revised valuation reflects a lower 8.0x enterprise value to earnings multiple to account for reduced near-term predictability.
| Order | Company | New Rating | Old Rating | Broker | |
|---|---|---|---|---|---|
| Upgrade | |||||
| 1 | TECHNOLOGY ONE LIMITED | Buy | Neutral | Jarden | |
| Downgrade | |||||
| 2 | ELDERS LIMITED | Neutral | Buy | Canaccord Genuity | |
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