There have been 3 upgrades and 2 downgrades from the 7 stockbrokers monitored by FNArena so far this week.
In the good books
Capricorn Metals (CMM) was upgraded to Neutral from Underperform by Macquarie
September quarter production was -8% below Macquarie’s estimates. The company has guided to FY22 production of 110-120,000 ounces.
The expectation for long-term production rates has been reiterated at 110-125,000 ounces per annum, largely in line with expectations.
Key to Macquarie’s near term outlook is the increase in throughput to 4.5mtpa run rate. Following recent share price weakness, the broker upgrades to Neutral from Underperform. Target is steady at $2.40.
Data#3 (DTL) was upgraded to Add from Hold by Morgans
After a recent share price fall, and with the current share price -20% adrift of Credit Suisse’s $5.92 target price, the broker upgrades its rating to Add from Hold.
The analyst points out the AGM is set for Thursday 28th October.
G.U.D. Holdings (GUD) was upgraded to Buy from Hold by Ord Minnett
G.U.D. Holdings reports a largely positive first-quarter update but Citi leaves its earnings forecasts unchanged and retains its $12.30 target price and Buy rating.
In what’s considered a positive for auto parts sales, Australian mobility trends are improving.
The analyst highlights price rises are planned in larger auto businesses in the 2H22 to counter supply chain headwinds. The significant discount to peer Bapcor ((BAP)) is still considered excessive.
In the not-so-good books
Ansell (ANN) was downgraded to Underperform from Neutral by Macquarie
Macquarie notes a benefit from price increases that were over and above the amount required to pass through costs, primarily related to examination and single-use gloves, represented around 60% of the increase to gross profit in FY21.
Hence, based on recent trends, the broker envisages downside risk to consensus expectations.
Given the risk, and with revised earnings forecasts that sit well below consensus, Macquarie downgrades to Underperform from Neutral. Target is lowered to $32.00 from $39.00.
Zip Co (Z1P) was downgraded to Neutral from Buy by Citi
Citi downgrades Zip Co to Neutral from Buy and lowers its target price to $7.40 from $7.95 to reflect lower customer growth forecasts and higher operating expenditure forecasts.
The latter reflects increasing promotional activity and global expansion, explains the analyst.
This comes as app downloads fell for the sixth consecutive month in September, notes the broker. Moreover, there’s considered potential for an equity raise, should the International expansion strategy accelerate.
The above was compiled from reports on FNArena. The FNArena database tabulates the views of seven major Australian and international stockbrokers: Citi, Credit Suisse, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS. Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regard to your circumstances.