Australian Broker Call

Bell Potter rates 360 as Buy (1) -

Bell Potter is positive about the strength of Life360's upcoming 3Q24 earnings report on November 13, pointing to a seasonally strong period for the company due to back-to-school in the northern hemisphere and robust paying circle growth.

The analyst is forecasting 22% revenue growth and annualised monthly revenue up 28% year-on-year to US$331.2m.

FY24 guidance is expected to be confirmed with a possibility for an EBITDA upgrade from current management expectations.

Buy rating unchanged. No change to earnings forecasts.

Target price rise to $22.50 from $20.50.

Target price is $22.50 Current Price is $20.45 Difference: $2.05
If 360 meets the Bell Potter target it will return approximately 10% (excluding dividends, fees and charges).

Current consensus price target is $20.76, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates ARB as Buy (1) -

Ord Minnett notes new vehicle sales fell -12.4% in September and down -7.2% for 1Q25, largely due to the cycling of high growth rates in 2023.

The analyst points to a sales decline in ARB Corp's key vehicle makes and models of -14.7% in September but stresses the company's order book remains robust. Sales growth has been tempered by staff shortages, the broker states.

Buy rating remains with a $46 target price. No changes to the broker's earnings forecasts.

Target price is $46.00 Current Price is $44.03 Difference: $1.97
If ARB meets the Ord Minnett target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $42.80, suggesting downside of -2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates ASX as Neutral (3) -

Average daily volume on the ASX rose by 10.4% in the September quarter compared to the previous corresponding period

The broker's target rises to $64 from $61. The Neutral rating is kept given Macquarie's concerns around both capex and opex in the medium-term.

Target price is $64.00 Current Price is $65.38 Difference: minus $1.38 (current price is over target).
If ASX meets the Macquarie target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $60.62, suggesting downside of -7.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates COE as Outperform (1) -

Following plant improvement, Macquarie highlights Orbost has consistently tracked close to nameplate since mid-July. The broker expects management will upgrade guidance given a stronger, more consistent performance.

The Outperform rating is reiterated. Cooper Energy remains Macquarie's key pick for East Coast Gas exposure. The target is increased to 31c from 30c.

Note: Subject to a shareholder vote at the November 7 AGM, the new name for Cooper Energy will be Amplitude Energy.

Target price is $0.31 Current Price is $0.19 Difference: $0.12
If COE meets the Macquarie target it will return approximately 63% (excluding dividends, fees and charges).

Current consensus price target is $0.27, suggesting upside of 43.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates DXC as Buy (1) -

Bell Potter considers the September vehicle sales. EV sales expanded 9% on August but are down -27.7% year-on-year with Tesla taking the highest fall at -48.8%.

Fuel reliant vehicle sales rose 4% year-on-year with an increase of 828k year-to-date which supports the broker's view regarding the "longevity" for convenience retail stores.

The broker observes the Dexus Convenience Retail REIT's share price is trading at discount of -15% to NTA.

No change to Buy rating. Target price lifts to $3.30 from $3.10 due to a lower risk free rate assumption.

Target price is $3.30 Current Price is $3.03 Difference: $0.27
If DXC meets the Bell Potter target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $3.19, suggesting upside of 5.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates EVN as Buy (1) -

In advance of 1Q FY25 results for the Gold sector, Citi remains positive given positive mark-to-market on a rapidly rising gold price.

Should the gold price hold around the current level and companies deliver on guidance, the analysts see plenty of potential share price upside.

The broker forecasts a $3,000/oz Australian dollar gold price in 2025. For the long-term (in US$), the forecast is increased to US$1900/oz from US$1,850/oz.

Citi's top pick in the sector is Evolution Mining, noting a further tailwind from copper which makes up around 30% of total revenue.

The target rises to $5.10 from $4.40. Buy.

Target price is $5.10 Current Price is $4.57 Difference: $0.53
If EVN meets the Citi target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $4.34, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates FBU as Neutral (3) -

Before turning more upbeat on the outlook for Fletcher Building, UBS is seeking increased evidence of a tangible rise in activity levels, opposed to industry contacts inferring a more positive environment post rate cuts in NZ.

The broker notes the next trading update will be at the ASM on October 23 with management not offering any guidance at the recent NZ$700m capital raising.

Earnings forecasts are lowered by -7% in FY25 and -4% in FY26 for lower home sale volumes versus higher construction earnings, as well as higher head office costs and softer Australian operating leverage.

Target price lowers to NZ$3.25 from NZ$3.45 with a Neutral rating maintained.

Current Price is $2.91. Target price not assessed.

Current consensus price target is $2.48, suggesting downside of -15.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates GNP as Buy (1) -

Bell Potter believes the takeover of CommTel by GenusPlus Group will be secured at an attractive valuation and be earnings positive to the group.

CommTel installs, maintains and manages telecommuncations systems to the mining, oil, gas, transport, utility and public safety sectors the broker notes, with deal completion expected at the end of October for a net outlay of around -$6m with up to a -$7m earn-out for intellectual property.

After accounting for the CommTel acquisition, the broker lifts EPS forecasts by 4% to 8% for FY26-FY27. No change to Buy rating. Target price rises to $2.90 from $2.70.

Target price is $2.90 Current Price is $2.49 Difference: $0.41
If GNP meets the Bell Potter target it will return approximately 16% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates GQG as Buy (1) -

GQG Partners reported net inflows for September of US$2.2bn with Ord Minnett noting a "positive" mix of wholesale inflows versus institutional outflows.

The September result exceeded August at US$1.2bn inflows but remained in line with the four-month average.

Although the Global Equity Fund has underperformed its benchmark by -4% in September the analyst is not too concerned as the year-to-date and one-year performance remains positive.

Due to the slightly better than expected inflows, the broker lifts EPS forecasts by 3% to 6% for FY24 to FY26.

Target price lifts to $3.35 from $3.30. No change to Buy rating.

Target price is $3.35 Current Price is $2.50 Difference: $0.85
If GQG meets the Ord Minnett target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $3.33, suggesting upside of 30.1% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates GT1 as Speculative Buy (1) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

Post an $8m equity placement, South Korean EcoPro Innovation is now the largest shareholder in Green Technology Metals, setting the stage for collaboration on the company's mine developments and lithium conversion plants.

Speculative Buy rating remains with a decline in the target price to 14c from 19c.

Target price is $0.14 Current Price is $0.09 Difference: $0.048
If GT1 meets the Bell Potter target it will return approximately 52% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates IFT as Buy (1) -

UBS highlights an increase of 6% in the valuation of Canberra Data Centres to NZ$5.3bn which results in a rise in the value of Infratil's stake in the company to NZ$5.3bn from around NZ$5bn.

The broker notes this is below the estimated value at NZ$5.5bn and an equivalent implied value of over NZ$6bn for the recent Airtrunk sale.

Canberra data centres has reported a rise of 22% in its total pipeline of work to 2.3GW by FY24 from 1.9GW, which represents an increase in demand from Melbourne and Auckland, the analyst observes.

Target price of NZ$12.40 unchanged, with a Buy rating.

Current Price is $11.16. Target price not assessed.

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates IGO as Sell (5) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

The broker updates IGO Ltd's earnings estimates for the downgrade in lithium prices with a decline in FY25 EPS of -29% and -30% in FY26.

Accordingly, the target price falls by -12.9% to $4. The analyst highlights the current share price suggests a significantly higher spot price than current levels. 

Sell rating remains.

Target price is $4.00 Current Price is $5.81 Difference: minus $1.81 (current price is over target).
If IGO meets the Bell Potter target it will return approximately minus 31% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $5.73, suggesting upside of 3.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.2

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates JDO as Initiation of coverage with Buy (1) -

UBS initiates coverage on Australian specialist, pure-play SME lender Judo Capital, with a Buy rating. It's felt the market has not fully appreciated an expected return on equity (ROE) in the low double-digit range out to FY29.

The broker's positive stance is supported by an around 40% 3-year EPS compound annual growth rate (CAGR) forecast. Judo's lending book is expected to double in the next four years to circa $20bn.

Achieving scale will be helped by structural drivers in the broader business banking market, note the analysts, and further commercial broker channel penetration.

A $2.10 target is set.

Target price is $2.10 Current Price is $1.67 Difference: $0.435
If JDO meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $1.72, suggesting upside of 0.9% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates LKE as Hold (3) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

The broker observes Lake Resources had net cash of $23m at June 30, no debt. Cost outs at the corporate level and project expenditure are anticipated to support funding availability until mid-2025.

Environmental approval for Kachi project is expected in March 2025. The offtake agreement is developing with a strategic partner, the analyst highlights.

No change to Hold rating. Target price falls to 4.8c from 12c.

Target price is $0.05 Current Price is $0.04 Difference: $0.006
If LKE meets the Bell Potter target it will return approximately 14% (excluding dividends, fees and charges).

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates LNW as Buy (1) -

Bell Potter reconsiders the outlook for Light & Wonder's Dragon Train product post the fall of -21% in the share price post the Nevada court injunction.

At this stage, the company continues to generate revenue from the 2.2k installed Dragon Train base.

If Light & Wonder needs to financially remediate Aristocrat Leisure ((ALL)) the analyst highlights Dragon Train's installed base could be converted to other premium "Kascada-compatible" games.

Recent industry checks reveal the company experienced ongoing strong performance in July-September.

No change to the Buy rating. Target lifted to $165 from $161.

Target price is $165.00 Current Price is $137.45 Difference: $27.55
If LNW meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $169.20, suggesting upside of 20.4% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates LTM as Downgrade to Hold from Buy (3) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

The broker believes the approach from Rio Tinto ((RIO)) to acquire Arcadium Lithium makes strategic sense given Rio's aim to develop lithium operations at scale.

Arcadium Lithium offers the company a lower-risk profile with approved development and expansion projects, as well as an "integrated chemicals business" at the lower end of the cost curve.

Rating downgraded to Hold from Buy. Target price lifts to $6.55 from $6.25.

Target price is $6.55 Current Price is $6.09 Difference: $0.46
If LTM meets the Bell Potter target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $5.65, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates LTM as Buy (1) -

In a research note penned prior to Rio Tinto confirming talks to acquire Arcadium Lithium, Citi (reacting to media speculation) reiterated it is cheaper to buy Arcadium than build Arcadium.

The analysts had previously estimated the replacement cost was around US$8bn compared to the rumoured bid price of between US$4-6bn.

Apart from value accretion, Arcadium could deliver to Rio scale in lithium, first quartile costs in familiar jurisdictions plus exposure to the Inflation Reduction Act (IRA)-critical minerals supply chains, highlights Citi.

The Buy rating and $6.50 target are maintained. 

Target price is $6.50 Current Price is $6.09 Difference: $0.41
If LTM meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $5.65, suggesting downside of -4.7% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates LTR as Speculative Buy (1) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

The broker lowers EPS forecasts for Liontown Resources on the back of reduced lithium price estimates. FY25 EPS declines to a loss of -9.8c from a loss of -1.5c and FY26 EPS falls -60%.

Liontown Resources' debt position and cash on hand of $380 are expected to suffice, taking the Kathleen Valley project to production and positive free cashflow, the analyst highlights.

Speculative Buy rating. The target slips to $1.50 from $1.90.

Target price is $1.50 Current Price is $0.88 Difference: $0.62
If LTR meets the Bell Potter target it will return approximately 70% (excluding dividends, fees and charges).

Current consensus price target is $0.98, suggesting upside of 16.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.1

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates MFG as Upgrade to Neutral from Underperform (3) -

Management's key strategies are yet to deliver sustained relative investment outperformance at Magellan Financial after several difficult years, observes Macquarie.

While outflows have stabilised, the analyst fails to see how meaningful inflows can be generated until investment performance metrics consistently outperform benchmarks.

First quarter FY25 retail outflows spiked to -$1.8bn as Magellan Global Fund (MGF) close-ended funds under management (FUM)
was converted to open-ended.

As the funds management multiple now represents more reasonable value, the broker's rating for Magellan Financial is upgraded to Neutral from Underperform. The target rises to $9.50 from $9.45.

Target price is $9.50 Current Price is $10.24 Difference: minus $0.74 (current price is over target).
If MFG meets the Macquarie target it will return approximately minus 7% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $10.06, suggesting upside of 0.7% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: -0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates MIN as Buy (1) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

The broker adjusts earnings forecasts for Mineral Resources for reduced lithium price estimates and higher average iron ore prices in 1Q25. FY25 EPS lifts by 17c and FY26 declines by -18%.

Target price declines to $62 from $66 for the change in lithium price assumptions.

No change to Buy rating.

Target price is $62.00 Current Price is $53.34 Difference: $8.66
If MIN meets the Bell Potter target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $49.36, suggesting downside of -3.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NEM as Buy (1) -

In advance of 1Q FY25 results for the Gold sector, Citi remains positive given positive mark-to-market on a rapidly rising gold price.

Should the gold price hold around the current level and companies deliver on guidance, the analysts see plenty of potential share price upside.

The broker forecasts a $3,000/oz Australian dollar gold price in 2025. For the long-term (in US$), the forecast is increased to US$1900/oz for US$1,850/oz.

Citi's top pick in the sector is Evolution Mining, noting a further tailwind from copper which makes up around 30% of total revenue.

For Newmont Corp, the Buy rating and $95 target are maintained.

Target price is $95.00 Current Price is $78.18 Difference: $16.82
If NEM meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.9

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NST as Buy (1) -

In advance of 1Q FY25 results for the Gold sector, Citi remains positive given positive mark-to-market on a rapidly rising gold price.

Should the gold price hold around the current level and companies deliver on guidance, the analysts see plenty of potential share price upside.

The broker forecasts a $3,000/oz Australian dollar gold price in 2025. For the long-term (in US$), the forecast is increased to US$1900/oz for US$1,850/oz.

Citi's top pick in the sector is Evolution Mining, noting a further tailwind from copper which makes up around 30% of total revenue.

For Northern Star Resources, the target rises to $18.30 from $16.70. Buy.

Target price is $18.30 Current Price is $15.84 Difference: $2.46
If NST meets the Citi target it will return approximately 16% (excluding dividends, fees and charges).

Current consensus price target is $16.56, suggesting upside of 3.1% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.6

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates NWH as Buy (1) -

NRW Holdings has been awarded the Castle Hill surface contract by Evolution Mining ((EVN)) and Citi is not surprised, given the general beneficial context for contractors such as NRW.

The broker expects to see more of similar announcements. This latest contract elevates Mining revenue coverage to 93% (vs forecasts) from 90% as at June 2024, the broker highlights.

Citi considers management's current guidance as conservative. NRW Holdings is the broker's Top Pick for exposure to the sector.

The contract is worth $360m and is expected to commence next month with expected completion in mid-FY30. Buy. Target $4.05.

Target price is $4.05 Current Price is $3.55 Difference: $0.5
If NWH meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $3.77, suggesting upside of 5.2% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates PLS as Hold (3) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

Bell Potter lowers earnings estimates for Pilbara Minerals on the back of reduced lithium price expectations. FY25 EPS falls by -62% and FY26 by -69%.

Post a visit to the company's Pilgangoora site the analyst notes an increase in the scale of the operation over the last year. The crushing and ore facility is highlighted as a "global first" in hard-rock lithium processing.

No change to Hold rating. Target price declines to $3 from $3.15.

Target price is $3.00 Current Price is $3.10 Difference: minus $0.1 (current price is over target).
If PLS meets the Bell Potter target it will return approximately minus 3% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $2.86, suggesting downside of -5.4% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Bell Potter rates PMT as Speculative Buy (1) -

Bell Potter has downgraded lithium price forecasts due to the current supply/demand outlook. The broker anticipates supply deficits will now develop a year later than previously forecast in 2027. Higher incentive prices are expected from 2026.

Accounting for the lower lithium price estimates, the broker lowers the target price for Patriot Battery Metals to 75c from 90c.

Bell Potter observes ongoing drilling is taking place with the potential for an upgrade and extension of the current project mineral resource estimate.

No change to Speculative Buy rating. 

Target price is $0.75 Current Price is $0.48 Difference: $0.27
If PMT meets the Bell Potter target it will return approximately 56% (excluding dividends, fees and charges).

Current consensus price target is $0.93, suggesting upside of 102.2% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY25:

Forecast for FY26:

This company reports in CAD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates PRU as Neutral, High Risk (3) -

In advance of 1Q FY25 results for the Gold sector, Citi remains positive given positive mark-to-market on a rapidly rising gold price.

Should the gold price hold around the current level and companies deliver on guidance, the analysts see plenty of potential share price upside.

The broker forecasts a $3,000/oz Australian dollar gold price in 2025. For the long-term (in US$), the forecast is increased to US$1900/oz for US$1,850/oz.

Citi's top pick in the sector is Evolution Mining, noting a further tailwind from copper which makes up around 30% of total revenue.

For Perseus Mining, the target rises to $3.10 from $3.00. Neutral, High Risk.

Target price is $3.10 Current Price is $2.54 Difference: $0.56
If PRU meets the Citi target it will return approximately 22% (excluding dividends, fees and charges).

Current consensus price target is $3.09, suggesting upside of 22.5% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Morgan Stanley rates RIO as Overweight (1) -

Morgan Stanley believes Rio Tinto's acquisition of Arcadium Lithium at the right price would be a sound strategic move by the company as a "bolt-on, medium sized transaction" offering the company a transition towards future related commodities.

The broker estimates the acquisition could boost Rio's 2028 revenue/EBITDA exposure to copper/aluminium/lithium to 43%/39% from 40%/37%. Lithium would represent around 4% of group revenue and EBITDA by 2028, the analyst highlights.

The broker highlights Rio Tinto has a strong balance sheet with net debt/EBITDA of less than 0.2 times or net debt of US$5.2bn at calendar year end.

Overweight rating is maintained. The target is $135.50. Industry view is Attractive.

Target price is $135.50 Current Price is $121.17 Difference: $14.33
If RIO meets the Morgan Stanley target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $127.42, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

UBS rates RIO as Neutral (3) -

Rio Tinto has made a non-binding bid for the fifth-largest lithium producer globally, Arcadium Lithium ((LTM)), which has low-cost upstream operations in Argentina and Canada, highlights UBS. 

There is no certainty any transaction will be agreed or will proceed, points out the broker. Media reports are suggesting potential price ranges of between US$4-6bn or higher.

The target price remains at $125, and a Neutral rating is maintained.

Target price is $125.00 Current Price is $121.17 Difference: $3.83
If RIO meets the UBS target it will return approximately 3% (excluding dividends, fees and charges).

Current consensus price target is $127.42, suggesting upside of 5.6% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

This company reports in USD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.7

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates RRL as Neutral (3) -

In advance of 1Q FY25 results for the Gold sector, Citi remains positive given positive mark-to-market on a rapidly rising gold price.

Should the gold price hold around the current level and companies deliver on guidance, the analysts see plenty of potential share price upside.

The broker forecasts a $3,000/oz Australian dollar gold price in 2025. For the long-term (in US$), the forecast is increased to US$1900/oz for US$1,850/oz.

Citi's top pick in the sector is Evolution Mining, noting a further tailwind from copper which makes up around 30% of total revenue.

For Regis Resources, the target rises to $2.20 from $1.85. Neutral.

Target price is $2.20 Current Price is $1.99 Difference: $0.21
If RRL meets the Citi target it will return approximately 11% (excluding dividends, fees and charges).

Current consensus price target is $2.04, suggesting upside of 2.0% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.3

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Ord Minnett rates SHV as Upgrade to Accumulate from Hold (2) -

Post the Australian Almond Conference last week, Ord Minnett believes the issues faced by Select Harvests which resulted in an emergency capital raisings and earnings downgrade were industry systemic rather than company specific.

The company has been let off the hook for not scoring an "own goal". 

The industry is expecting a return of volumes in 2024 as well as a good start to 2025 crop season.

Better industry conditions helped raise the target price to $4.60 from $4.35 and upgrade the stock to Accumulate from Hold.

Target price is $4.60 Current Price is $3.65 Difference: $0.95
If SHV meets the Ord Minnett target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $4.52, suggesting upside of 19.2% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.5

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Shaw and Partners rates SMI as Buy, High Risk (1) -

Santana Minerals' Bendigo-Ophir Gold Project in New Zealand has been recognised as a project of national significance, explains Shaw and Partners.

The project was officially designated as a ‘Fast-track Project’ under Schedule 2 of the New Zealand government's Fast-Track Approvals Bill.

The aim of the Bill is to provide a streamlined decision-making process to speed the delivery of infrastructure and development projects, points out the broker.

Buy rated (High risk). Target price $2.86.

Target price is $2.86 Current Price is $2.25 Difference: $0.61
If SMI meets the Shaw and Partners target it will return approximately 27% (excluding dividends, fees and charges).

The company's fiscal year ends in June.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Macquarie rates SPK as Outperform (1) -

The current Spark New Zealand share price is factoring in a dividend cut to around NZ20cps, suggests Macquarie.

The near-term challenge in lifting free cash flow (FCF) to cover a NZ27.5cps dividend is partly responsibe for a slumping share price since FY24 results, believes the broker.

Other reasons for share price pressure include a possible exit from the MSCI world index (decision late-November) and the market adjusting to increased earnings cyclicality, in the analyst's view.

Outperform. Target is reduced to NZ$4.72 from NZ$4.94.

Current Price is $2.85. Target price not assessed.

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 1.0

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources

Citi rates XRO as Buy (1) -

Citi peaks into possible outcomes for the upcoming 1H25 earnings report from Xero in November. 

The analyst points to an increase in headcount of 9% year-on-year, currently, from the latest LinkedIn data and up 6% half-on-half for April through to September. The rise has been underpinned by tech up 16% and engineering up 10% year-on-year.

On an average basis, the headcount has only risen 4% year-on-year, the broker emphasises. The estimated -$15m marketing spend on two Xerocons this year in London and New Orleans is not believed to be a material cost driver.

Citi views concerns over cost forecasts being understated are conflated by the market. Citi retains a Buy rating and $158.20 target price.

Target price is $158.20 Current Price is $147.72 Difference: $10.48
If XRO meets the Citi target it will return approximately 7% (excluding dividends, fees and charges).

Current consensus price target is $161.43, suggesting upside of 11.5% (ex-dividends)

Forecast for FY25:

Forecast for FY26:

This company reports in NZD. All estimates have been converted into AUD by FNArena at present FX values.

Market Sentiment: 0.8

All consensus data are updated until yesterday. FNArena's consensus calculations require a minimum of three sources