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This Week’s ASX Broker Moves: Mid-August Reporting Season Highlights
Welcome back to the ASX Broker Moves, where we deliver essential updates on broker ratings and target prices for the Australian stock market. This week’s edition coincides with the mid-August reporting season, offering a wealth of insights into recent brokerage changes.
Rating Updates
Upgraded Ratings ✅
Here are the recent upgrades from brokers, indicating bullish sentiment:
| Company | Broker | New Rating | Old Rating | Target Price | TP Upside % |
|---|---|---|---|---|---|
| Life360 (360) | Ord Minnett | Accumulate | Hold | $45.00 | 1.4% |
| AGL Energy (AGL) | Goldman Sachs | Buy | Neutral | $11.35 | 25.1% |
| AGL Energy (AGL) | Ord Minnett | Buy | Hold | $11.00 | 21.3% |
| Alkane Resources (ALK) | Ord Minnett | Accumulate | Hold | $1.00 | 19.8% |
| Atlas Arteria (ALX) | Jefferies | Buy | Reduce | $6.42 | 21.1% |
| AMP (AMP) | Jefferies | Buy | Hold | $2.02 | 13.8% |
| Droneshield (DRO) | Shaw and Partners | Buy | Hold | $3.60 | -14.9% |
| JB Hi-Fi (JBH) | UBS | Neutral | Sell | $112.00 | -3.5% |
| Pexa Group (PXA) | Jarden | Overweight | Neutral | $17.75 | 12.1% |
| REA Group (REA) | Bell Potter | Buy | Hold | $284.00 | 13.7% |
Noteworthy Upgrades Insights
- AGL Energy (ASX: AGL): UBS reports that AGL can sustain higher dividends and is positioned well for the energy transition, forecasting increased demand and prices.
- Nick Scali (ASX: NCK): Ord Minnett highlights the stellar performance of Nick Scali’s Australasian operations with revenue expectations significantly above market forecasts, leading to a rating upgrade.
- JB Hi-Fi (ASX: JBH): UBS praises JB Hi-Fi’s potential, indicating that it may now be more appropriately valued in comparison to its competitors.
Downgraded Ratings ❌
In contrast, several companies have faced downgrades, signalling caution.
| Company | Broker | New Rating | Old Rating | Target Price | TP Upside % |
|---|---|---|---|---|---|
| Audinate Group (AD8) | Jefferies | Hold | Buy | $7.50 | 29.5% |
| AGL Energy (AGL) | RBC Capital Markets | Sector Perform | Outperform | $10.00 | 10.3% |
| ALS (ALQ) | Goldman Sachs | Neutral | Buy | $17.70 | -5.7% |
| Beach Energy (BPT) | JPMorgan | Underweight | Neutral | $1.05 | -15.3% |
| Bluescope Steel (BSL) | JPMorgan | Neutral | Overweight | $25.90 | 7.5% |
Key Insights on Downgrades
- Beach Energy (ASX: BPT): Analysts from Macquarie express concerns over its diminishing control over valuation and operational stability, forecasting challenges ahead.
- Mineral Resources (ASX: MIN): UBS suggests MIN stock is now overpriced following a strong rise, despite operational improvements.
Initiations 🌟
New ratings have also emerged, showing growing interest in certain firms.
| Company | Broker | New Rating | Target Price | TP Upside % |
|---|---|---|---|---|
| Life360 (360) | Citi | Buy | $46.20 | 4.1% |
| Amplia Therapeutics (ATX) | Bell Potter | Speculative Buy | $0.42 | 121.1% |
Target Price Increases ≥ +10% 🚀
Several companies have seen significant target price increases, reflecting optimism about their future performance.
| Company | Broker | Target Price | Old TP | TP Change % | TP Upside % |
|---|---|---|---|---|---|
| Patriot Battery Metals (PMT) | UBS | $0.65 | $0.33 | 97.0% | 38.3% |
| Electro Optic Systems (EOS) | Ord Minnett | $4.25 | $2.20 | 93.2% | -29.3% |
Highlights in Target Price Increases
- Electro Optic Systems (ASX: EOS): Increased contracting momentum led analysts to raise their estimates and outlook significantly.
Target Price Decreases ≤ -10% 🪓
On the flip side, some companies have faced substantial reductions in target prices.
| Company | Broker | New TP | Old TP | TP Change % | TP Upside % |
|---|---|---|---|---|---|
| Coronado Global (CRN) | Argonaut Securities | $0.30 | $0.70 | -57.1% | 1.7% |
| Appen (APX) | Ord Minnett | $1.65 | $3.30 | -50.0% | 84.4% |
Conclusion
The mid-August reporting period is revealing a dynamic shift within the ASX with broker ratings reflecting varied sentiment across sectors. Upgrades in expectations for AGL Energy and Nick Scali demonstrate confidence in certain companies, while downgrades for Beach Energy reflect caution in an uncertain operational environment.
Stay tuned for our daily evening wrap for complete updates on broker assessments!
