Australian Broker Call

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

Bell Potter downgrades Adairs to Hold from Buy with a decline in target price by -21% to $2.10 from $2.65.

The analyst highlights FY25 guidance for revenue at $514m–$618m broadly met expectations, but earnings before interest and tax guidance was -10% below consensus forecasts at the mid-point.

Notably, Adairs is performing well with year-to-date FY25 sales growth of 9% against group sales growth of 6%, with Focus on Furniture being the issue in terms of underperforming against expectations.

Bell Potter downgrades EPS estimates by -20.5% for FY25 and -28.9% for FY26 due to lower Focus on Furniture sales and a weakening in margins, as well as for Adairs due to increased promotional activity.

Target price is $2.10 Current Price is $2.02 Difference: $0.08
If ADH meets the Bell Potter target it will return approximately 4% (excluding dividends, fees and charges).

Current consensus price target is $2.33, suggesting upside of 6.7% (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 ALL as Buy (1) -

Based on data from consulting firm Eilers & Krejcik Gaming, Bell Potter assesses a strong performance across Aristocrat Leisure’s premium and core game segments, underpinned by success in the US and Canada.

The broker points to slot machine game Phoenix Link performing at 2.4 times floor average and Dragon Link at 3.0 times, with the latter remaining a key driver despite its age.

The broker's earnings forecasts are revised by -4% for FY25, an up 1% for FY26, and 5% for FY27 due to updated currency assumptions and modelling of Product Madness direct-to-consumer revenues.

Higher expected litigation costs have led to an increase in forecast corporate expenses, while the analysts expect Aristocrat to reach a small net cash position by September.

Bell Potter retains a Buy rating and a $79.00 target price.

Target price is $79.00 Current Price is $65.92 Difference: $13.08
If ALL meets the Bell Potter target it will return approximately 20% (excluding dividends, fees and charges).

Current consensus price target is $73.23, suggesting upside of 12.6% (ex-dividends)

The company's fiscal year ends in September.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

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

Citi rates ASB as Neutral (3) -

Citi believes there are reasons to remain positive on Austal in the near term, even after the strong price gains. 

Planned increases in defense spending in the US and Australia bode well for the company's outlook. The broker points to a $4bn revenue opportunity in Australia from the finalisation of the Strategic Shipbuilding Agreement, which it expects to happen soon.

The broker also sees a higher risk of takeover after South Korea's Hanwha Group received CFIUS approval to increase its stake in the company to 100% earlier this month.

Additional upside risk could come from the successful resolution of the T-ATS REA, though some execution risks remain from other programs.

Neutral rating with high risk. Target rises to $6.10 from $4.09.

Target price is $6.10 Current Price is $6.03 Difference: $0.07
If ASB meets the Citi target it will return approximately 1% (excluding dividends, fees and charges).

Current consensus price target is $5.48, suggesting downside of -6.7% (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

Macquarie rates ASX as Neutral (3) -

Macquarie highlights two companies seeking to enter the listings space in Australia, with Cboe's application to ASIC for a license to operate a listing market domestically, with plans to launch in the September quarter this year.

Following a takeover by the Canadian Stock Exchange of NSX, which is flagged for completion in September, the exchange is looking to focus on early-stage and small-cap companies, with a tilt toward mining and resources, life sciences, and emerging technologies.

The analyst explains the merged group plans to streamline dual listings between Australia and Canada. NSX already holds a license, so Macquarie points to the challenge of adding brokers for distribution.

ASX is due to report earnings on August 14. Neutral rating and $66 target price unchanged.

Target price is $66.00 Current Price is $69.11 Difference: minus $3.11 (current price is over target).
If ASX meets the Macquarie target it will return approximately minus 5% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $66.08, suggesting downside of -4.4% (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 AV1 as Upgrade to Buy from Speculative Buy (1) -

Adveritas has completed an $8.5m capital raising via the issue of 85m shares at 10c to support US expansion, e-commerce growth, product development and new integrations, observes Bell Potter.

The raise was larger than previously forecast by the broker but resulted in fewer shares issued, leading to modest EPS upgrades by the analysts of around 1% in FY26 and FY27.

Bell Potter's cash forecasts are lifted to $9.2m for FY25 and $9.9m for FY26, with the broker assuming the company remains modestly cash flow positive across FY26. The target is raised to 18c from 15c.

Bell Potter upgrades to Buy from Speculative rating, citing a stronger balance sheet and reduced risk profile.

Target price is $0.18 Current Price is $0.12 Difference: $0.065
If AV1 meets the Bell Potter target it will return approximately 57% (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

UBS rates BOE as Buy (1) -

UBS upgraded its U308 price forecast for FY25 by 1% to US$74.4/lb and by 7% for FY26 to US$75.5/lb on an improved US policy backdrop.

The broker notes Boss Energy's recent announcement it reached its FY25 production target of 850klb on June 17. At the June quarterly on July 28, the broker expects FY26 production guidance of 1.7Mlb vs the study guide of 1.6Mlb.

FY26 EPS forecast upgraded by 25%. Target price rises to $3.50 from $3.30. Buy retained.

Target price is $3.50 Current Price is $4.38 Difference: minus $0.88 (current price is over target).
If BOE meets the UBS target it will return approximately minus 20% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $4.19, suggesting downside of -4.6% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.9

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

Citi rates CKF as Buy (1) -

After a detailed analysis of Collins Foods' better-than-expected FY25 result and FY26 guidance, Citi believes there's upside to the guidance on material improvement for the consumer from rate cuts.

The broker is also more confident about the company's outlook for Germany, noting recent hires for the Yum! brand and stores' remodelling.

The analyst lifted FY26 net profit forecast by 4% to match the guidance and raised FY27 by 2%.

Buy. Target rises to $10.13 from $9.60 on earnings revisions, valuation roll-forward, higher multiples and lower discount.

Target price is $10.13 Current Price is $8.52 Difference: $1.61
If CKF meets the Citi target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.82, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Macquarie rates CKF as Neutral (3) -

Macquarie highlights a robust FY25 result for Collins Foods, with momentum noted for sales growth across the company's major geographies.

The analyst attributes the improvement to better consumer sentiment and management's strategy changes, resulting in both Australia and Germany posting positive comparative sales in year-to-date FY26. Sales in the Netherlands are down by -0.2%.

Further domestic interest rate cuts and price deflation for both chicken and potatoes set the stage for improvements in earnings (EBITDA) margins for the Australian business. The broker forecasts the margin to rise by 25bps to 19.5% on the previous year.

Macquarie lifts EPS estimates by 7% for FY26 and 6% for FY27. Target price rises to $8.40 from $8.20 with no change to the Neutral rating.

Target price is $8.40 Current Price is $8.52 Difference: minus $0.12 (current price is over target).
If CKF meets the Macquarie target it will return approximately minus 1% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $9.82, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Morgans rates CKF as Buy (1) -

Morgans assesses Collins Foods' FY25 result as materially better than expected, noting considerable improvement in 2H25 profitability on stronger same-store sales growth, cost deflation and operational improvements.

However, the FY26 underlying net profit guidance for low to mid-teens growth fell short of the broker's expectation, prompting a -5% downgrade for the FY26 forecast.

The analyst also lowered the underlying net profit forecast for FY27 and FY28 by -15.7% and -17.5%, respectively, on more subdued same-store sales growth estimates and margins.

Buy maintained as the broker reckons 1H25 was a low point for margins in this cycle and the company will benefit from a recovery in operating conditions. Target cut to $10.10 from $10.50.

Target price is $10.10 Current Price is $8.52 Difference: $1.58
If CKF meets the Morgans target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.82, suggesting upside of 7.2% (ex-dividends)

The company's fiscal year ends in April.

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

Ord Minnett rates CKF as Accumulate (2) -

Ord Minnett highlights the wider 2H25 margin expansion in Collins Foods' Australian operations was the impressive part in the FY25 earnings 'beat'.

While the update for the first eight weeks of FY26 and full FY26 earnings guidance disappointed, the broker expects improved margins from cost management and higher labour productivity. 

FY26 same-store sales growth forecast cut to 2% from 3%, though this is higher than 1.6% in the first eight weeks. In Europe, the broker expects cost savings to drive earnings in Germany and the Netherlands.

FY26 EPS forecast trimmed by -4.6% but FY27-28 lifted by 9% and 7.5%, respectively. Target price $9.50. Accumulate maintained.

Target price is $9.50 Current Price is $8.52 Difference: $0.98
If CKF meets the Ord Minnett target it will return approximately 12% (excluding dividends, fees and charges).

Current consensus price target is $9.82, suggesting upside of 7.2% (ex-dividends)

Forecast for FY26:

Forecast for FY27:

Market Sentiment: 0.8

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

UBS rates FBU as Neutral (3) -

Fletcher Building's revised EBIT guidance for FY25 of NZ$386-391m, as flagged at this week's investor day, fell short of UBS' forecast of NZ$394m.

The investor day focused on the company's plan to move to a more decentralised structure, cost savings and a resilient balance sheet, all announced previously. 

As per commentary, the company is targeting net debt of NZ$400-900m from around NZ$1.1bn currently, and won't pay dividends until this range is achieved.

The broker notes FY26 consensus EBIT forecast is slowly declining to NZ$475m from NZ$500 but a further retreat towards its forecast of NZ$457m is considered possible.

Neutral. Target unchanged at NZ$3.40.

Current Price is $2.76. Target price not assessed.

Current consensus price target is $3.04, suggesting upside of 13.4% (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

Macquarie rates GGP as Initiation of coverage with Outperform (1) -

Macquarie initiates coverage of Greatland Resources with a target of $7.80 and an Outperform rating.

The company listed on the ASX and now has a dual listing with the LSE, following a share consolidation of 20:1 and a placement at $6.90, raising $64m.

From a fundamental view, the analyst continues to see value in the stock while acknowledging potential buying momentum from Australian institutions and domestic investors.

Macquarie's current earnings estimates do not include the Havieron expansion to 4.5mt per annum, with the feasibility study anticipated in 4Q 2025.

Target price is $7.80

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

Morgan Stanley rates IAG as Equal-weight (3) -

Morgan Stanley notes Insurance Australia Group is one of the largest purchasers of reinsurance globally and stands to benefit from improving margins and enhanced earnings quality amid recent global shifts.

The analysts explain the reinsurance cycle is turning, with aggregate covers re-emerging in the market. It's felt the general direction of reinsurance pricing will likely be negative from here, favouring the primary insurers.

The target for Insurance Australia Group rises to $8.40 from $7.95. Equal-weight rating. Industry View: In-Line.

Target price is $8.40 Current Price is $9.09 Difference: minus $0.69 (current price is over target).
If IAG meets the Morgan Stanley target it will return approximately minus 8% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $8.88, suggesting downside of -2.3% (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

Citi rates IMD as Neutral (3) -

Citi highlights the elevated junior raisings, supportive commodity prices, and rate cuts are all positive for Imdex's outlook, but its industry feedback still suggests a lack of exploration activity pickup in FY26.

The broker notes junior raisings crossed the US$1bn mark for three out of the last four months, but there's been no meaningful improvement in deployment to exploration.

This poses a downside risk to FY26 earnings, though this is partly offset by a rise in capitalised R&D spend and an increase in average sensors on hire.

The analyst cut FY26 EBITDA forecast slightly. Target trimmed to $2.80 from $2.90. Neutral retained.

Target price is $2.80 Current Price is $2.74 Difference: $0.06
If IMD meets the Citi target it will return approximately 2% (excluding dividends, fees and charges).

Current consensus price target is $2.87, suggesting upside of 7.1% (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

Bell Potter rates LGI as Buy (1) -

Bell Potter highlights the recent successful commissioning of LGI’s Eastern Creek project, which added 4MW of capacity and is expected to contribute $3m–3.5m in annual earnings (EBITDA) from FY26.

Eastern Creek is a landfill gas-to-energy facility.

New contracts across four councils have led the broker to lift forecast Australian Carbon Credit Unit (ACCU) volumes by 4% in FY26 and FY27.

The analysts' electricity price assumptions have been upgraded by 10% in both years, reflecting ASX Energy’s latest forward pricing for NSW and QLD.

ASX Energy is a division of the Australian Securities Exchange, providing a platform for trading electricity derivatives.

Bell Potter raises its target price to $3.65 from $3.50 and retains a Buy rating.

Target price is $3.65 Current Price is $3.02 Difference: $0.63
If LGI meets the Bell Potter target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $3.52, suggesting upside of 16.4% (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 LNW as Buy (1) -

Bell Potter notes Light & Wonder leads the Top NEW Premium Leased & WAP rankings (Eilers & Krejcik data) with 45% share.

The rankings are industry benchmarks highlighting the best-performing newly released premium leased and wide area progressive (WAP) slot machine games in North American casinos

This outcome was driven by strong performance from titles in the Ultimate Fire Link, Monopoly, Kong, and Wizard of Oz franchises, explain the analysts.

The broker highlights stabilisation in Huff N Puff premium titles at 1.7 times floor average, though share in the Top NEW Core segment declined due to title rotation and strong performance from Aristocrat Leisure ((ALL)).

A Nevada court ruling is pending on a discovery motion by Aristocrat, which may require Light & Wonder to disclose Hold & Spin game math models, explains Bell Potter, potentially impacting litigation risk.

The broker retains a Buy rating and a $194.00 target price.

Target price is $194.00 Current Price is $128.71 Difference: $65.29
If LNW meets the Bell Potter target it will return approximately 51% (excluding dividends, fees and charges).

Current consensus price target is $194.00, suggesting upside of 36.3% (ex-dividends)

The company's fiscal year ends in December.

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

Morgan Stanley rates LYC as Overweight (1) -

Lynas Rare Earths has upgraded its Mt Weld Mineral Resource by 70% to 364mt at 2.8% rare earth oxides (REO), while Ore Reserves rose 190% to 74.4mt at 3.4% REO.

Morgan Stanley views this as highly strategic given demand for NdPr oxides and the global scale of the deposit, with operations now underpinned to well beyond 2060.

The broker's production and earnings (EBITDA) forecasts remain unchanged, although the resource update significantly extends asset life and strengthens valuation.

Bell Potter continues to see China-related pricing volatility and Mt Weld execution as key risks, alongside broader rare earth market uncertainty. An Overweight rating is retained and the target is raised to $10.50 from $10.00. Industry View: In-Line.

Target price is $10.50 Current Price is $9.18 Difference: $1.32
If LYC meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $8.23, suggesting downside of -9.4% (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

UBS rates PDN as Buy (1) -

UBS upgraded its U308 price forecast for FY25 by 1% to US$74.4/lb and by 7% for FY26 to US$75.5/lb on an improved US policy backdrop.

The broker revisited the outlook for Paladin Energy, noting the focus at the June quarterly on July 23 will be on the restart of mining operations.

FY26 production estimate downgraded by -4% but this is more than offset, the broker adds, by the forecast for cost improvements and higher uranium prices.

Buy. Target rises to $9.40 from $9.10.

Target price is $9.40 Current Price is $7.49 Difference: $1.91
If PDN meets the UBS target it will return approximately 26% (excluding dividends, fees and charges).

Current consensus price target is $8.54, suggesting upside of 10.6% (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: 1.0

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

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

Ord Minnett revisited Reece's outlook following share weakness in recent months, noting FY25 will likely be a cyclical low for operating earnings and return on invested capital.

The broker acknowledges the near-term outlook is challenging. However, the company's active investment through the downturn and expected modest improvement in construction activity in Australia/NZ will improve returns from here.

Rating upgraded to Accumulate from Hold. Target unchanged at $20.40.

Target price is $20.40 Current Price is $16.86 Difference: $3.54
If REH meets the Ord Minnett target it will return approximately 21% (excluding dividends, fees and charges).

Current consensus price target is $18.41, suggesting upside of 6.9% (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

Morgan Stanley rates RIO as Equal-weight (3) -

Morgan Stanley notes one-third of five replacement projects for Rio Tinto have been delivered in line with the broker's expectations.

Hope Downs 2 delivery is on track, with capex within the company's guidance and contracts for non-process facilities awarded last month, the analyst details.

The delivery of two other replacement projects, West Angelas and Nammuldi, remains a concern for Rio, Morgan Stanley notes, with both running behind schedule.

Rio also announced it intends to invest 50% of US$1.6bn with Hancock Prospecting to develop the Hope Downs 2 iron ore project as part of the replacement projects. First scheduled ore is expected in 2027, with approvals received.

Morgan Stanley retains an Equal-weight rating and a $119.50 target price. Industry View: In-line.

Target price is $119.50 Current Price is $104.94 Difference: $14.56
If RIO meets the Morgan Stanley target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $115.92, suggesting upside of 11.1% (ex-dividends)

The company's fiscal year ends in December.

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: 0.2

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

UBS rates SPK as Buy (1) -

UBS believes the market is undervaluing Spark New Zealand's Data Centre (DC Co) business and sees upside potential from a majority stake sale expected in August.

The broker estimates Spark's 51% stake in DC Co could be worth NZ$400-NZ$600m, with the transaction helping to de-gear and sharpen focus on the core telco segment.

Dividend forecasts for FY25 and FY26 are reduced to NZ17cps from NZ25cps and NZ22.5cps, respectively, though UBS expects NZ12.5cps in special dividends across FY28-30 to support capital management.

UBS analysts have maintained a Buy rating on Spark New Zealand, lowering their price target to NZ$3.75 from NZ$4.25.

Current Price is $2.15. Target price not assessed.

Current consensus price target is N/A

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: 0.7

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

Morgan Stanley rates SUN as Overweight (1) -

Morgan Stanley notes Suncorp Group is one of the largest purchasers of reinsurance globally and stands to benefit from improving margins and enhanced earnings quality amid recent global shifts.

The analysts explain the reinsurance cycle is turning, with aggregate covers re-emerging in the market. It's felt the general direction of reinsurance pricing will likely be negative from here, favouring the primary insurers.

The broker's target for Suncorp Group rises to $25.20 from $25.00. Overweight rating. Industry View: In-Line.

Target price is $25.20 Current Price is $21.55 Difference: $3.65
If SUN meets the Morgan Stanley target it will return approximately 17% (excluding dividends, fees and charges).

Current consensus price target is $21.96, suggesting upside of 1.2% (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

Citi rates TWE as Neutral (3) -

Following Treasury Wine Estates' downgrade in guidance for Penfolds' FY26 EBITS, Citi analysts cut FY26 EBITS forecast by -3% while highlighting a range of earnings estimates are possible with plenty of moving inputs.

Overall, the broker is incrementally more cautious about the company's outlook, expecting uncertainty to prevail until 2026 and some months after the incoming CEO joins on October 27.

FY26 EPS forecast cut by -1% and FY27 is unchanged. Target price trimmed to $8.50 from $8.68 on earnings revisions and lower valuation multiples.

Neutral remains.

Target price is $8.50 Current Price is $8.00 Difference: $0.5
If TWE meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.72, suggesting upside of 23.3% (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

Macquarie rates TWE as Neutral (3) -

At Treasury Wine Estates' investor update, management reaffirmed FY25 guidance, while FY26 guidance for Penfolds has been lowered for earnings before interest and tax growth to the low-to-mid teens from 15%, resulting from investment in China to rebuild the brand.

FY27 Penfolds earnings before interest and tax guidance has not changed, although the analyst stresses that given the current challenges in wine, the forecasts seem unrealistic.

Management also emphasised the shares are "materially undervalued" and announced a buy-back of 5% of issued capital, to be detailed at the August FY25 results announcement.

Beyond the Penfolds recovery, Macquarie notes other segments remain challenged, with slight earnings growth for Treasury Americas due to Daou, while Treasury Collective sales continue to shrink. The company is focused on stabilising the division's sales.

The analyst lowers EPS estimates by -1% for FY25 and -4% for FY26. Target price shifts lower to $8.50 with a Neutral rating retained.

Target price is $8.50 Current Price is $8.00 Difference: $0.5
If TWE meets the Macquarie target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $9.72, suggesting upside of 23.3% (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

Morgan Stanley rates TWE as Overweight (1) -

Morgan Stanley downgrades Treasury Wine Estates' target price to $10.75 from $12 while retaining an Overweight rating.

The company's market update revealed a weakening outlook for FY26 due to softer earnings from Treasury Americas, with Penfolds guidance for earnings before interest and tax lowered to low-to-mid teens growth from around 15% previously, due to higher investment spending.

Excluding Daou, Americas earnings are expected to decline due to weak demand and inventory rebalancing in FY26. Management also announced an intended share buyback of up to 5% of issued capital at the August FY25 results.

Morgan Stanley lowers FY26–FY27 EPS estimates by -4% to -7% as a result of downgraded expectations for the Americas alongside revised assumptions for Penfolds.

Target price is $10.75 Current Price is $8.00 Difference: $2.75
If TWE meets the Morgan Stanley target it will return approximately 34% (excluding dividends, fees and charges).

Current consensus price target is $9.72, suggesting upside of 23.3% (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

Ord Minnett rates TWE as Hold (3) -

Ord Minnett notes Treasury Wine Estates' update highlighted weak trading conditions in not just the Penfolds product but also in the luxury brands, due mainly to soft consumer sentiment.

Amid such a backdrop, the broker questions the Daou acquisition decision, especially as the company downgraded its medium-term sales growth forecast.

The broker also believes the planned 5% share buyback is not the best use of the balance sheet, given the leverage and uncertain earnings profile.

FY26 EPS forecast cut by -1.3%, and FY25 and FY27 slightly raised. Hold. Target unchanged at $9.50.

Target price is $9.50 Current Price is $8.00 Difference: $1.5
If TWE meets the Ord Minnett target it will return approximately 19% (excluding dividends, fees and charges).

Current consensus price target is $9.72, suggesting upside of 23.3% (ex-dividends)

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 TWE as Buy (1) -

UBS notes Treasury Wine Estates maintained FY25 EBITS guidance at the previously downgraded level but guided to a lower outlook for FY26. The main downgrade was in the Penfolds EBITS growth to low-mid double digits, down from 15% previously.

The company also expects the Americas Luxury business to grow modestly, with Daou's net sales revenue growth to fall short of its low double-digit target. The Collective Division is expected to see revenue declines in the near term.

The broker cut FY25 EPS forecast by -0.1% and lowered FY26-27 by -6.4% and -7.7%, respectively. The company's plan for on-market buyback of up to 5% of issued capital is not factored into the broker's forecasts.

Buy retained. Target cut to $10 from $12.

Target price is $10.00 Current Price is $8.00 Difference: $2
If TWE meets the UBS target it will return approximately 25% (excluding dividends, fees and charges).

Current consensus price target is $9.72, suggesting upside of 23.3% (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 XRO as Buy (1) -

Citi, in a quick response to today's announcement, expresses a sympathetic view on Xero's move to fully acquire Melio in the US, arguing the added syndication capability and being embedded with banking partners could help accelerate Xero's core accounting growth in the US.

As per commentary, Xero management's guidance for FY28 revenue to be more than double implies circa 15%-plus upgrades to market consensus revenue (on a pro-forma basis incl. revenue synergies), neutral to slight upside to consensus FCF forecast for $850m, and around -5% downgrades on a FCF/share basis.

Citi does wonder what this deal might mean for Xero's partnership with Bill.com which has only just gone live.

Buy. Target $210.

Target price is $210.00 Current Price is $194.21 Difference: $15.79
If XRO meets the Citi target it will return approximately 8% (excluding dividends, fees and charges).

Current consensus price target is $212.80, suggesting upside of 9.6% (ex-dividends)

The company's fiscal year ends in March.

Forecast for FY26:

Forecast for FY27:

This company reports in NZD. 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