Australian Broker Call

Citi rates APE as Sell (5) -

Citi highlights "top picks" for small caps (ex-ASX 100).

Eagers Automotive retains a Sell rating and $9.50 target price, with the broker emphasising the market is not recognising how challenging trading conditions were in 2H 2024 and the resulting impact on gross and profit margins.

The analyst references industry feedback indicating profit before tax margins declined to 1% over the period due to an oversupply of new cars and declining retail demand.

Consensus expectations for margins currently stand at 3.3% for 2H 2024, which Citi believes is too high, with the cycle yet to bottom.

Acquisitions for Eagers Automotive are considered dilutive to margins in the short term.

Target price is $9.50 Current Price is $12.29 Difference: minus $2.79 (current price is over target).
If APE meets the Citi target it will return approximately minus 23% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $11.87, suggesting downside of -1.5% (ex-dividends)

The company's fiscal year ends in December.

Forecast for FY24:

Forecast for FY25:

Market Sentiment: 0.4

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

Bell Potter rates BOE as Buy (1) -

Bell Potter notes Boss Energy is due to report 2Q25 results on January 29, forecasting Honeymoon production of 150klbs, a rise of 67% on the previous quarter.

The broker anticipates column 1 will operate at full capacity and column 2 at an average of 29% over the quarter. Costs are estimated at $69.71/lb and are forecast to decline in 2H25 to $62/lb as columns 2 and 3 ramp up.

Bell Potter believes the stock remains "attractive" compared to its peers' valuations and retains a Buy rating with a $4.70 target price.

Earnings forecasts are adjusted for weaker-than-expected December uranium spot prices and changes to foreign exchange rates.

Target price is $4.70 Current Price is $2.59 Difference: $2.11
If BOE meets the Bell Potter target it will return approximately 81% (excluding dividends, fees and charges).

Current consensus price target is $3.83, suggesting upside of 45.4% (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

Citi rates CIA as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

Champion Iron retains a Buy rating and $7.40 target price, with the broker expecting production growth driven by the ramp-up of the Bloom Lake Phase II expansion, including an upgrade of 7.5mtpa to 69% direct pellet feed.

This, says the broker, will allow the company to reduce its reliance on Chinese buyers and focus on growing sales to Middle Eastern and European markets.

The analyst notes higher-grade iron ore will be in greater demand as steelmakers aim to lower their carbon footprint.

Target price is $7.40 Current Price is $5.69 Difference: $1.71
If CIA meets the Citi target it will return approximately 30% (excluding dividends, fees and charges).

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 CSC as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

Capstone Copper retains a Buy rating and $13.60 target price as a pure copper play, with the broker maintaining a "bullish" view on copper.

The company is expected to double production to around 400kt p.a., with opportunities to leverage a decline in the cost curve.

Citi anticipates the incoming CEO to reset guidance expectations and highlights a possible major shareholder selldown as a catalyst for the company's inclusion in the Small Ordinaries Index.

Target price is $13.60 Current Price is $10.69 Difference: $2.91
If CSC meets the Citi target it will return approximately 27% (excluding dividends, fees and charges).

Current consensus price target is $12.87, suggesting upside of 30.0% (ex-dividends)

The company's fiscal year ends in December.

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

Citi rates CTD as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

Corporate Travel Management retains a Buy rating and $13.90 target price, as the broker expects the backdrop for the business travel industry to normalise.

Citi anticipates a reversal of American Airlines commissions, improved US corporate travel, and progress in A&NZ market share with better Sleepspace contributions.

The stock is trading at valuations -30% below the 10-year pre-pandemic average on depressed earnings.

Target price is $13.90 Current Price is $12.70 Difference: $1.2
If CTD meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $14.20, suggesting upside of 11.8% (ex-dividends)

The company's fiscal year ends in June.

Forecast for FY25:

Forecast for FY26:

Market Sentiment: 0.4

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

Citi rates EVT as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

EVT Ltd remains Buy rated with a $12.73 target price, with the broker citing signs management plans to undertake a strategic realignment of the business, with hotels being "prioritised" for growth.

The analyst references the Chairman's AGM comments on the goal of achieving a higher share price and dividends.

An improvement in momentum from movies is also anticipated, with multiple blockbusters set for release in 2025, including Avatar: Fire and Ash, Zootopia 2, Jurassic World Rebirth, Superman, and a Minecraft movie.

Target price is $12.73 Current Price is $11.20 Difference: $1.53
If EVT meets the Citi target it will return approximately 14% (excluding dividends, fees and charges).

Current consensus price target is $13.24, suggesting upside of 19.8% (ex-dividends)

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 FLT as Re-initiation of coverage with Overweight (1) -

Morgan Stanley re-initiates coverage of Flight Centre Travel with an Overweight rating and a $22 target price, noting the stock was previously covered between 2011 and 2015, with the broker observing the company for a decade.

The analyst believes the longer-term growth drivers are in place despite near-term challenges. Flight Centre has a competitive advantage in scale, brand, and switching costs, the analyst believes.

Morgan Stanley highlights differences with consensus on the company's corporate culture, including staff rewards based on measurable outcomes, technology ownership to leverage core systems, and supplier terms. There is upside potential for margins.

An improved and scalable cost structure offers more flexibility than in 2015. Overweight rating. Target price $22. Industry view: In-Line.

Target price is $22.00 Current Price is $16.04 Difference: $5.96
If FLT meets the Morgan Stanley target it will return approximately 37% (excluding dividends, fees and charges).

Current consensus price target is $22.68, suggesting upside of 40.7% (ex-dividends)

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 IFL as Neutral (3) -

UBS notes CC Capital announced a cash bid for Insignia Financial at $4.30 per share, 7.5% higher than Bain Capital's December 2024 bid of $4 per share, which was rejected by the board.

The broker believes the offer is opportunistic and unlikely to change the board's view. The largest shareholder, Tanarra Capital (15.8% stake), also stated the Bain offer was insufficient and expressed a preference for the company to execute on its strategic goals.

No change to the $4.05 target price and Neutral rating.

Target price is $4.05 Current Price is $4.12 Difference: minus $0.07 (current price is over target).
If IFL meets the UBS target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $3.83, suggesting downside of -9.6% (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 IGO as Neutral (3) -

Citi adjusts the earnings forecasts for IGO Ltd due to the removal of a cash dividend receipt from TLEA, following the company's pre-Christmas announcement of a dividend not being paid in FY25.

The broker highlighted inventory at Kwinana will continue to rise due to market conditions, with volumes of only 6,000t for the September quarter compared to nameplate capacity of 24kt.

Since 3Q22, IGO owes TLEA more than -$600m in lost EBITDA/improvement capex, and the analyst believes FY25 will be a challenging year for Kwinana to prove it can generate earnings over the longer term.

Target price lifts to $5.40 from $5.30 on NAV adjustments. No change to Neutral rating.

Target price is $5.40 Current Price is $4.94 Difference: $0.46
If IGO meets the Citi target it will return approximately 9% (excluding dividends, fees and charges).

Current consensus price target is $5.72, suggesting upside of 15.0% (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 NWH as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

NRW Holdings remains Buy rated with a $4.05 target price, with the broker expecting ongoing momentum across the company's segments.

The order book represents more than two years of revenue, based on the broker's FY25 revenue forecast, and the active tender balance is $5.1bn.

Citi notes recent weather impacts in Queensland during December could affect whether the company upgrades guidance at the interim result.

A site visit to Kalgoorlie revealed the company is ahead of schedule with the growth project at Kalgoorlie Consolidated Gold Mines. Issues at Whyalla are noted as well-publicised and could impact 1H25 cash flows, the broker states.

Target price is $4.05 Current Price is $3.81 Difference: $0.24
If NWH meets the Citi target it will return approximately 6% (excluding dividends, fees and charges).

Current consensus price target is $3.77, suggesting upside of 9.5% (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

Bell Potter rates PDN as Buy (1) -

Bell Potter notes Paladin Energy is expected to announce 2Q25 results on January 22, with the broker forecasting Langer Heinrich production of 0.54mlbs, reflecting growth of 15% on 1Q25 when production problems were experienced.

The broker views the resolution of the Fission acquisition in December as positive for investor sentiment but emphasises the "road to redemption" regarding Langer Heinrich production issues remains ongoing.

Bell Potter highlights downside price volatility for uranium in December and the deferral of supply-side final investment decisions, such as Deep Yellow ((DYL)), which increases the potential for a supply shortage in uranium.

Buy rating retained. Target price rises to $10.50 from $9.70 on changes to production estimates.

Earnings forecasts for FY25 are lowered on mark-to-market uranium price assumptions due to weaker-than-expected prices in December 2024.

Target price is $10.50 Current Price is $7.91 Difference: $2.59
If PDN meets the Bell Potter target it will return approximately 33% (excluding dividends, fees and charges).

Current consensus price target is $12.04, suggesting upside of 46.5% (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: 1.0

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

Citi rates SDR as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

SiteMinder retains a Buy rating and $7.65 target price and remains the top pick in the Small Cap Tech sector, with revenue growth anticipated to accelerate on the back of new products.

The broker forecasts revenue growth to rise to 29% in 2H25 from a forecast 19% in 1H25, with 8% growth from the Smart Distribution program underpinning FY26 growth and Dynamic Revenue-plus contributing in FY27.

Citi notes the stock has fallen -10% since the analyst pointed to a "negative short-term view" and believes further downside is limited.

Target price is $7.65 Current Price is $5.82 Difference: $1.83
If SDR meets the Citi target it will return approximately 31% (excluding dividends, fees and charges).

Current consensus price target is $6.94, suggesting upside of 23.0% (ex-dividends)

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

Citi rates TPW as Buy (1) -

Citi highlights "top picks" for small caps (ex-ASX 100).

Temple & Webster retains a Buy rating and $13.50 target price, with recent activity indications suggesting the company will report robust performance across usage and web traffic for Black Friday sales in 2024.

The analyst highlights this is on top of cycling strong results in the previous corresponding period.

Noting some concerns over market share loss in the online category and the rally in the share price toward the end of 2024, Citi believes Temple & Webster offers a better risk-reward profile than other comparable retailers.

Strategic strengths for the company include competitive pricing in homewares, the cheapest and fastest delivery among competitors, growing brand recognition, and robust positioning against bricks-and-mortar competitors.

Target price is $13.50 Current Price is $13.77 Difference: minus $0.27 (current price is over target).
If TPW meets the Citi target it will return approximately minus 2% (excluding dividends, fees and charges - negative figures indicate an expected loss).

Current consensus price target is $12.52, suggesting downside of -7.3% (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