News
Evening Wrap: ASX 200 bumbles way to EOFY as gold, tech, and health care lead, tax loss selling hobbles lithium stocks
Fri 28 Jun 24, 5:28pm (AEST)
Broker Watch
The ASX stocks major brokers love (and hate) the most
Wed 26 Jun 24, 3:54pm (AEST)
Source: Shutterstock
Stocks in article
Key Points
- Macquarie has followed UBS’s lead from a couple of weeks ago and applied sweeping upgrades in the ASX gold sector.
- Not so lucky this week, lithium stocks, also part of a sweeping sector review by Macquarie.
- Deterra Royalties (DRR), Pilbara Minerals (PLS), and The Star Entertainment Group (SGR) each issued updates to the market that clearly weren’t well received.
It was another busy week in broker moves.
Macquarie has followed UBS’s lead from a couple of weeks ago and applied sweeping upgrades in the ASX gold sector. 7 stocks received ratings upgrades, 6 of them to OUTPERFORM. Westgold Resources (ASX: WGX), West African Resources (ASX: WAF), and Resolute Mining (ASX: RSG) were the most notable of that last cohort as they also enjoyed price target increases of greater than 16%.
Of the other rating upgrade winners, Helia Group (ASX: HLI), Iluka Resources (ASX: ILU), Monadelphous Group (ASX: MND), REA Group (ASX: REA), Treasury Wine Estates (ASX: TWE), Woolworths Group (ASX: WOW), and Wisetech Global (ASX: WTC), stand out as beneficiaries of ratings akin to a BUY.
Lithium stocks were not as lucky this week in Macquarie's sweeping sector review. Atlantic Lithium (ASX: A11) and Argosy Minerals (ASX: AGY) lost out here, with AGY going to UNDERPERFORM.
Also on the wrong end of the brokers’ wrath was energy company Beach Energy (ASX: BPT) after it delivered a disappointing Strategic Review Outcomes Presentation. It’s rare for the brokers to vote so unanimously (you’ll see BPT also figures poorly in the price target changes list), with two new ratings akin to a SELL.
As for the biggest price target changes, as mentioned earlier, gold stocks generally took out the top spots, but the most recurring stocks (for the wrong reasons) were Deterra Royalties (ASX: DRR), Pilbara Minerals (ASX: PLS), and The Star Entertainment Group (ASX: SGR). Each issued updates to the market that clearly weren’t well received.
There are plenty of other interesting broker moves for the period – and you can only get this level of detail on what they’re up to from us – so let’s dive in!
How to read broker recommendations 🔎
Typically, there are two major components of a broker’s view:
Rating: A call to action, usually along the lines of buy, hold, or sell, but depending on the broker’s ratings system, can be somewhere in between (e.g., accumulate or add is typically between a hold and a buy).
Price target (PT): The price at which the broker expects the stock will be trading at some point in the future, generally within the next 12 months.
Broker upgrades since Wednesday 19 June
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
Bellevue Gold (BGL) | Macquarie | Outperform | Neutral | $2.10 | 18.6% |
Capricorn Metals (CMM) | Macquarie | Neutral | Underperform | $5.10 | 3.9% |
Evolution Mining (EVN) | Macquarie | Outperform | Neutral | $4.30 | 22.9% |
Gold Road Resources (GOR) | Macquarie | Outperform | Neutral | $1.90 | 14.5% |
Helia Group (HLI) | Macquarie | Outperform | Neutral | $3.90 | -0.3% |
Iluka Resources (ILU) | Citi | Buy | Neutral | $7.80 | 18.2% |
Monadelphous Group (MND) | Argonaut Securities | Buy | Hold | $14.45 | 9.5% |
Metcash (MTS) | E&P | Neutral | Negative | $3.93 | 5.6% |
New Hope Corporation (NHC) | Macquarie | Neutral | Underperform | $4.00 | -16.5% |
Pilbara Minerals (PLS) | Morgans | Add | Hold | $3.70 | 17.5% |
REA Group (REA) | Citi | Buy | Neutral | $221.00 | 11.3% |
Ramelius Resources (RMS) | Macquarie | Outperform | Neutral | $2.10 | 8.2% |
St Barbara (SBM) | Macquarie | Outperform | Neutral | $0.28 | 40.0% |
Treasury Wine Estates (TWE) | Jarden | Buy | Overweight | $14.50 | 15.4% |
Westgold Resources (WGX) | Macquarie | Outperform | Neutral | $2.80 | 8.9% |
Woolworths Group (WOW) | Morgan Stanley | Overweight | Underweight | $37.00 | 8.9% |
Wisetech Global (WTC) | CLSA | Buy | Outperform | $112.00 | 19.0% |
Biggest broker rating upgrades since Wednesday 19 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Tuesday 25 June.
From the brokers:
Macquarie upgrades Helia Group (ASX: HLI) to OUTPERFORM from NEUTRAL
HLI's largest customer, CBA, is running a tender on the entire group's LMI business, including Bankwest (separately insured with QBE).
On the balance of probabilities, we think HLI would likely become the exclusive LMI provider for CBA's entire group.
Today's negative share-price reaction presents an opportunity, especially coupled with a potential acceleration of the on-market buyback.
The price target was retained at $3.90
Citi upgrades Iluka Resources (ASX: ILU) to BUY from NEUTRAL
“We’ve upgraded ILU to Buy from Neutral on valuation grounds as the shares have fallen >20% since May with no change to our $7.80 TP”
The price target was retained at $7.80
Citi upgrades to REA (ASX: REA) BUY from NEUTRAL
"We expect recent product/tech investments to result in strong earnings growth over the medium to long term, with potential upside from stronger than expected seller and mortgage leads monetisation"
"We also see REA as having plenty of flexibility in its cost base which should support long-term margins"
"REA is our preferred pick, especially given larger geo-mix headwind for Domain"
Broker downgrades since Wednesday 19 June
Company | Broker | New Rating | Old Rating | Price Target | PT Upside% |
|---|---|---|---|---|---|
Atlantic Lithium (A11) | Macquarie | Neutral | Outperform | $0.42 | 15.1% |
Argosy Minerals (AGY) | Macquarie | Underperform | Neutral | $0.08 | 8.1% |
Austal (ASB) | Macquarie | Neutral | Outperform | $2.55 | 4.5% |
Beach Energy (BPT) | Citi | Sell | Neutral | $1.40 | -6.7% |
Beach Energy (BPT) | Jarden | Neutral | Overweight | $1.55 | 3.3% |
Beach Energy (BPT) | Macquarie | Neutral | Outperform | $1.55 | 3.3% |
Beach Energy (BPT) | Bank of America | Underperform | Neutral | $1.40 | -6.7% |
Capitol Health (CAJ) | Bell Potter | Hold | Buy | $0.33 | 8.7% |
City Chic Collective (CCX) | Bell Potter | Hold | Buy | $0.20 | 53.8% |
Deterra Royalties (DRR) | Morgan Stanley | Equal-Weight | Overweight | $3.70 | -7.5% |
Evolution Mining (EVN) | UBS | Neutral | Buy | $2.80 | -20.0% |
Global Lithium Resources (GL1) | Macquarie | Neutral | Outperform | $0.30 | 11.1% |
Mineral Resources (MIN) | Macquarie | Neutral | Outperform | $62.00 | 10.9% |
Premier Investments (PMV) | E&P | Neutral | Positive | $33.62 | 4.0% |
Resmed Inc (RMD) | E&P | Neutral | Positive | $33.00 | 17.5% |
Resmed Inc (RMD) | Citi | Neutral | Buy | $30.00 | 6.8% |
South32 (S32) | Morgan Stanley | Equal-Weight | Overweight | $3.80 | 1.6% |
Sims (SGM) | Bank of America | Underperform | Neutral | $9.40 | 151.3% |
Star Entertainment Group (SGR) | Morgans | Hold | Add | $0.50 | 7.5% |
Biggest broker rating downgrades since Wednesday 19 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices on Tuesday 25 June.
From the brokers:
Citi downgrades Beach Energy (ASX: BPT) to SELL from BUY
"As we flagged, the consensus forecasts had missed on the outlook for production and CAPEX"
"While we had correctly pre-empted production, the CAPEX was still higher than our cautious forecasts, largely in the Cooper Basin, but with no apparent requisite increase in medium-term production"
"In this regard, we think the share price has more work to reflect the lower quality nature of the portfolio"
Biggest broker price target changes since Wednesday 19 June
Company | Broker | Rating | New PT | Old PT | PT Change% | PT Upside% |
|---|---|---|---|---|---|---|
WA1 Resources (WA1) | Bell Potter | Buy | $28.00 | $17.65 | 58.6% | 67.0% |
Westgold Resources (WGX) | Macquarie | Outperform | $2.80 | $2.20 | 27.3% | 8.9% |
Aristocrat Leisure (ALL) | UBS | Buy | $56.00 | $44.20 | 26.7% | 12.0% |
West African Resources (WAF) | Macquarie | Outperform | $2.00 | $1.60 | 25.0% | 25.0% |
Alumina (AWC) | Morgan Stanley | Equal-Weight | $1.60 | $1.30 | 23.1% | -8.6% |
Austal (ASB) | Macquarie | Neutral | $2.55 | $2.10 | 21.4% | 4.5% |
Woolworths Group (WOW) | Morgan Stanley | Overweight | $37.00 | $31.00 | 19.4% | 8.9% |
Newmont Corporation (NEM) | Macquarie | Outperform | $83.00 | $71.00 | 16.9% | 29.9% |
Resolute Mining (RSG) | Macquarie | Outperform | $0.70 | $0.60 | 16.7% | 28.4% |
REA Group (REA) | Citi | Buy | $221.00 | $192.60 | 14.7% | 11.3% |
Jupiter Mines (JMS) | Macquarie | Outperform | $0.40 | $0.35 | 14.3% | 25.0% |
South32 (S32) | Morgan Stanley | Equal-Weight | $3.80 | $3.35 | 13.4% | 1.6% |
Treasury Wine Estates (TWE) | Goldman Sachs | Buy | $15.20 | $13.40 | 13.4% | 20.9% |
South32 (S32) | Morgan Stanley | Equal-Weight | $3.80 | $3.35 | 13.4% | 1.6% |
Wisetech Global (WTC) | CLSA | Buy | $112.00 | $99.00 | 13.1% | 19.0% |
Capitol Health (CAJ) | Bell Potter | Hold | $0.33 | $0.29 | 12.4% | 8.7% |
St Barbara (SBM) | Macquarie | Outperform | $0.28 | $0.25 | 12.0% | 40.0% |
Gold Road Resources (GOR) | Macquarie | Outperform | $1.90 | $1.70 | 11.8% | 14.5% |
Regis Resources (RRL) | Macquarie | Outperform | $2.90 | $2.60 | 11.5% | 62.9% |
Coronado Global Resources Inc. (CRN) | Macquarie | Outperform | $2.00 | $1.80 | 11.1% | 67.4% |
Perseus Mining (PRU) | Macquarie | Outperform | $3.00 | $2.70 | 11.1% | 27.1% |
Red 5 (RED) | Macquarie | Outperform | $0.55 | $0.50 | 10.0% | 42.9% |
The Star Entertainment Group (SGR) | Macquarie | Neutral | $0.45 | $0.50 | -10.0% | -3.2% |
The Star Entertainment Group (SGR) | CLSA | Outperform | $0.52 | $0.58 | -10.3% | 11.8% |
Deterra Royalties (DRR) | Macquarie | Neutral | $4.00 | $4.50 | -11.1% | 0.0% |
Beach Energy (BPT) | Morgan Stanley | Equal-Weight | $1.49 | $1.68 | -11.3% | -0.7% |
Beach Energy (BPT) | Jarden | Neutral | $1.55 | $1.75 | -11.4% | 3.3% |
Carnaby Resources (CNB) | Macquarie | Outperform | $1.00 | $1.13 | -11.5% | 90.5% |
Domain Holdings Australia (DHG) | Citi | Buy | $3.40 | $3.85 | -11.7% | 10.4% |
AMA Group (AMA) | Bell Potter | Buy | $0.07 | $0.08 | -12.5% | 75.0% |
Beach Energy (BPT) | Citi | Sell | $1.40 | $1.60 | -12.5% | -6.7% |
Beach Energy (BPT) | Bank of America | Underperform | $1.40 | $1.60 | -12.5% | -6.7% |
Aeris Resources (AIS) | Macquarie | Neutral | $0.26 | $0.30 | -13.3% | 6.1% |
Pilbara Minerals (PLS) | Jefferies | Buy | $3.80 | $4.40 | -13.6% | 20.6% |
Regis Resources (RRL) | Morgan Stanley | Overweight | $2.10 | $2.50 | -16.0% | 18.0% |
Deterra Royalties (DRR) | Citi | Neutral | $4.35 | $5.20 | -16.3% | 8.7% |
IGO (IGO) | Morgan Stanley | Underweight | $5.05 | $6.05 | -16.5% | -12.0% |
Resmed Inc (RMD) | Citi | Neutral | $30.00 | $36.00 | -16.7% | 6.8% |
Mineral Resources (MIN) | Macquarie | Neutral | $62.00 | $75.00 | -17.3% | 10.9% |
Pilbara Minerals (PLS) | Morgan Stanley | Underweight | $2.75 | $3.35 | -17.9% | -12.7% |
Sims (SGM) | Bank of America | Underperform | $9.40 | $11.50 | -18.3% | -7.8% |
Liontown Resources (LTR) | Macquarie | Neutral | $1.05 | $1.30 | -19.2% | 16.7% |
Galan Lithium (GLN) | Macquarie | Neutral | $0.20 | $0.25 | -20.0% | 17.6% |
Syrah Resources (SYR) | Morgan Stanley | Equal-Weight | $0.40 | $0.50 | -20.0% | 17.6% |
Beach Energy (BPT) | Macquarie | Neutral | $1.55 | $1.95 | -20.5% | 3.3% |
IGO (IGO) | Macquarie | Neutral | $6.00 | $7.60 | -21.1% | 4.5% |
Patriot Battery Metals Inc. (PMT) | Macquarie | Outperform | $1.50 | $1.90 | -21.1% | 167.9% |
Pilbara Minerals (PLS) | Macquarie | Neutral | $3.25 | $4.20 | -22.6% | 3.2% |
The Star Entertainment Group (SGR) | Morgans | Hold | $0.50 | $0.65 | -23.1% | 7.5% |
Arcadium Lithium (LTM) | Macquarie | Outperform | $6.60 | $9.40 | -29.8% | 31.7% |
Piedmont Lithium Inc. (PLL) | Macquarie | Outperform | $0.25 | $0.36 | -30.6% | 78.6% |
Deterra Royalties (DRR) | Morgan Stanley | Equal-Weight | $3.70 | $5.60 | -33.9% | -7.5% |
Deterra Royalties (DRR) | Morgan Stanley | Equal-Weight | $3.70 | $5.60 | -33.9% | -7.5% |
Evolution Mining (EVN) | UBS | Neutral | $2.80 | $4.45 | -37.1% | -20.0% |
Vaneck Glbl Listed Private Credit (Hedged) ETF (LEO) | Canaccord Genuity | Hold | $0.50 | $0.80 | -37.5% | 56.3% |
Core Lithium (CXO) | Macquarie | Neutral | $0.09 | $0.15 | -40.0% | 4.7% |
Argosy Minerals (AGY) | Macquarie | Underperform | $0.08 | $0.16 | -50.0% | 8.1% |
City Chic Collective (CCX) | Bell Potter | Hold | $0.20 | $0.62 | -67.7% | 53.8% |
Biggest broker price target changes since Wednesday 19 June. Price Target Upside/Downside (“PT Upside%”) values in the last column are based on closing prices as on Tuesday 25 June.
From the brokers:
Bell Potter increases price target on WA1 Resources (ASX: WA1) to $28.00 from $17.65 (+67%)
"WA1 has passed a significant de-risking hurdle in confirming that niobium minerals from its Luni project can be concentrated via a two-stage floatation circuit with recoveries and concentrate grades in line with dominant global producers"
"We see the potential for Luni to be a globally significant niobium project, capable of generating on average A$514m in annual EBITDA"
Bell Potter cuts price target on Pilbara Minerals (ASX: PLS) to $2.75 from $3.35 (-18%)
"We see potential for price to overshoot to the downside driven by a lack of supply and health of balance sheets"
"PLS has the second-lowest LCE growth on a percentage basis from FY23- 26e and is the least exposed to the downstream out of our Li coverage"
Carl has over 30-years investing experience, helping investors navigate several bull and bear markets over this time. He is a well respected markets commentator who specialises in how the global macro impacts Australian and US equities. Carl has a passion for technical analysis and has taught his unique brand of price-action trend following to thousands of Aussie investors.
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