Rises in both average target prices and average earnings forecasts outpaced falls. Seven of the ten positive changes to earnings forecasts in the table below reflect higher price forecasts by UBS and Macquarie for lithium and gold, respectively.

Serko received an around 20% boost to average target price after Ord Minnett raised its target by 39% to $5.91 due to a series of agreements over the past six weeks with US-listed Sabre Corp, including the acquisition of Sabre’s GetThere online booking tool (OBT) for a cost of -$US12m plus performance payments.

GetThere is the second largest OBT in the North American market with annualised revenue of circa $20m per annum. Both parties have also entered a five-year partnership to bring new capabilities to Sabre. In return, Sabre will also be co-selling and co-marketing Serko’s solutions in North America.

Overall, Ord Minnett forecasts the transaction will result in Serko’s free cash flow turning negative in FY25 and FY26 followed by a material reversal from FY28 onwards. Macquarie reduced its target for Serko to NZ$4.38 from NZ$5.00, citing deferred profitability due to the dilutive impact of the GetThere purchase and the commencement of a -$40m R&D program.

Despite Serko receiving the largest percentage drop in average earnings forecasts from brokers last week, amplified by the small forecast figures involved, Macquarie highlighted potential for future earnings upgrades. Such optimism stems from the consensus forecast remaining below management’s revised NZ$250m revenue target. This broker suggested international market share growth will be bolstered by the GetThere acquisition, while Serko’s partnerships with Bookings.com and Sabre are expected to mitigate risks associated with its international expansion.

The average target for Pro Medicus also jumped by nearly 17% last week, after a 16% rise in the prior week, as brokers continue to update their forecasts following the company’s largest ever contract win (10-year, $330m with Trinity Health) in the US. Bell Potter doubled its target price to $260, acknowledging it may have underestimated the value accretion from contract upgrades and the impact of price leadership in key markets.

A persistent shortage of radiologists in the US is resulting in longer wait times and heightened demand for workforce productivity, which the analysts noted is boosting the popularity of the company’s Visage suite of products. Potential remains for an even higher average target price next week as Citi, Ord Minnett and Macquarie are yet to update forecasts for Pro Medicus after the Trinity contract win.

On the flipside, the average target price for 29Metals fell by -28% last week after analysts at Citi and Ord Minnett expressed concerns around borrowing levels. Ord Minnett lowered its target to 35 cents from 75 cents and downgraded to Hold from Speculative Buy following a 1-for-1.43 non-renounceable entitlement issue at 27 cents per share.

The analyst noted the next two years will be a period of negative cash flow as the company invests to get its projects on-line and fully operational. Of the $180m capital raise, $112m will allocated to funding the Gossan Valley copper-zinc mine in Western Australia’s Golden Grove precinct to first ore, a project which Citi described as modest with high cash flow sensitivity to commodity prices.

This broker had expected proceeds from a raise would help recapitalise the balance sheet and assessed repaying a US$80m tranche of borrowings due in 2028 will be difficult. The analysts lowered the target by -20 cents to 25 cents and downgraded to Sell, High Risk from Neutral, High Risk. On the earnings front last week, here Select Harvests received the largest average percentage increase from analysts, as well as two ratings upgrades from separate brokers due to an improving almond price outlook. Following solid FY24 results, Ord Minnett noted potential upside in FY25 for Select Harvests driven by a global almond price rally, a good (but not outstanding) crop bloom, and stable cost escalations. Costs are rising, but remain within inflation levels, according to the broker.

UBS raised its almond price forecast to $8.50/kg from $8.10/kg and $8.20/kg for FY25 and FY26, respectively, noting recent industry discussions regarding the Californian almond sector have been the most positive for Select Harvests in years. Both brokers upgraded to Buy, with UBS lifting its rating to $4.40 from $4.00 and Ord Minnett to $4.95 from $4.60.

Following Select Harvests on the earnings upgrade list are IGO Ltd, Pilbara Minerals and Mineral Resources (in fifth place) after UBS raised its 2025 and 2026 spodumene price forecasts by 7% and 17%, respectively, to US$800/t and US$850/t. The analysts believe lithium prices have bottomed out but are expected to remain range-bound over the next 18 months. While benefiting from the broker’s higher lithium price forecasts, earnings estimates for Liontown Resources fell materially after an optimised mine plan at the Kathleen Valley mine resulted in lower expected volumes, which more than offset lower estimates for costs and capex.

Average earnings forecasts also rose for Newmont Corp, Regis Resources, Capricorn Metals and Perseus Mining after the Macquarie Commodities Strategy team updated its mid-term outlook for gold, forecasting an average quarterly cycle peak of US$2,800/oz in the second quarter of 2025. Newmont Corp remains the broker’s preferred large-cap gold stock, with 2025 guidance risk now viewed as minimal following recent updates. Shares in Collins Food fell to $7.93 from $8.65 last week following the release of disappointing first half results due to the challenging backdrop for consumers. However, KFC same store sales are on the improve and the company is leveraged to a consumer upswing.

In the good books: upgrades

COLLINS FOODS LIMITED ((CKF)) was upgraded to Buy from Neutral by Citi. B/H/S: 5/1/0

On follow-through assessment post this week’s FY24 release, Citi analysts have decided to upgrade their rating for Collins Foods to Buy from Neutral. Price target has lifted to $9.38 from $7.88.

COSOL LIMITED ((COS)) was upgraded to Buy from Hold by Bell Potter. B/H/S: 2/0/0

Bell Potter upgrades Cosol to Buy from Hold, with a 9% increase in the target price to $1.20. Cosol has announced the acquisition of data analytics company Toustone for -$12m upfront (-$22.4m in total), with annual revenue of $12m generated through a recurring subscription-based model. The broker highlights Toustone’s “blue-chip” client base, which includes exposure to the transport, agriculture, and heavy industry infrastructure sectors. Bell Potter raises EPS forecasts by 4% and 6% for FY25 and FY26, respectively. A higher valuation and EPS account for the increase in the target price.

GQG PARTNERS INC ((GQG)) was upgraded to Add from Hold by Morgans. B/H/S: 4/1/0

Morgans observes fund outflows for GQG Partners appeared to occur immediately after the negative news regarding Adani Group, a significant exposure, but have been mild since the initial first-day impact. The broker highlights November investment strategy performance ranged from -3.3% to 6.8%, leading to relatively flat estimated monthly funds under management (FUM) before net fund flow impacts. Morgans upgrades its rating for GQG Partners to Add from Hold and retains the $2.47 target price. Management plans to implement a $100m buyback starting December 6. See also GQG downgrade.

IGO LIMITED ((IGO)) was upgraded to Neutral from Sell by UBS. B/H/S: 1/3/2

UBS raises its 2025 and 2026 spodumene price forecasts by 7% and 17%, respectively, to US$800/t and US$850/t, supporting improved earnings and cash flow projections for lithium stocks under its coverage. While lithium equities are no longer expensive, the broker observes they have yet to fully reflect potential adjustments to growth plans in the current lower-price environment. Despite these revisions, free cash flow generation after capex remains limited. For IGO Ltd, UBS highlights a more attractive valuation opportunity and upgrades its rating to Neutral from Sell, with the target price unchanged at $5.50.

METCASH LIMITED ((MTS)) was upgraded to Buy from Neutral by Citi. B/H/S: 3/2/0

Citi upgrades Metcash to Buy from Neutral. Target price lifts to $3.70 from $3.40. The broker observes 1H25 net profit met expectations and is upbeat about the more challenged food business showing increased earnings resilience. Hardware was weak, but an earnings recovery in FY26 is possible. Citi explains hardware is exposed to detached housing and notes signs private sector detached housing approvals bottomed in the March quarter. The analyst forecasts around 9% hardware earnings growth in FY26. Earnings for food are forecast to grow around 4% in FY25 and FY26, with liquor remaining challenged due to competitive pressures. The broker lowers earnings forecasts for liquor in FY25/FY26 by -5%. Buy rated with a $3.70 target price.

STEADFAST GROUP LIMITED ((SDF)) was upgraded to Overweight from Equal weight by Morgan Stanley. B/H/S: 4/0/0

Morgan Stanley upgrades Steadfast Group to Overweight from Equal-weight and raises the target price to $6.98 from $6.64. Industry View: In-Line. The broker continues to rate concerns around the stock as overdone and believes the company offers a quality business with structural and cyclical earnings “drivers.” Steadfast reported a robust 1Q25 trading update, with net profit up 23%. Growth in A&NZ is likely to transfer to the US and global operations, the analyst states. The recent H.W. Wood acquisition is viewed as a positive strategic step, offering more client products in Australia and US markets. At 16x FY25 earnings, the valuation is appealing relative to many insurers and financials. Morgan Stanley lifts net profit forecasts by 4% for FY25 and 5% for FY26, driven by premium growth and a margin lift.

SELECT HARVESTS LIMITED ((SHV)) was upgraded to Buy from Accumulate by Ord Minnett and to Buy from Neutral by UBS. B/H/S: 3/0/0

Ord Minnett raises its target price for Select Harvests to $4.95 from $4.60 and upgrades its rating to Buy from Accumulate following solid FY24 results. The broker sees potential upside in FY25 driven by the global almond price rally, a good (but not outstanding) crop bloom, and stable cost escalations. Costs are rising, but remain within inflation levels, according to the broker. As expected, no dividend was declared.  Even though FY24 results were broadly in line with guidance, UBS raises its target for Select Harvests to $4.40 from $4.00 and upgrades to Buy from Neutral. The broker has greater confidence in the almond price outlook, a stable cost base, and ramp in sustainable processing volumes in FY26. The analysts’ almond price forecast is increased to $8.50/kg from $8.10/kg and $8.20/kg for FY25 and FY26, respectively. Recent industry discussions regarding the Californian almond sector have been the most positive for Select Harvests in years, suggests the broker.

WESTPAC BANKING CORPORATION ((WBC)) was upgraded to Buy from Neutral by UBS. B/H/S: 1/2/3

UBS assesses fair value for Australian banks is approximately -10.2% below current prices but acknowledges their reputation for predictability and stability, particularly regarding capital returns, remains intact. The broker attributes the strong share price outperformance of banks to factors such as flows, relative positioning, and momentum rather than earnings-driven fundamentals. UBS expresses a preference for exposure through Westpac, Judo Capital, Macquarie Bank, and ANZ Bank. The target price for Westpac increases to $37 from $33. The rating is upgraded to Buy from Neutral as it is the most likely to benefit from cost-out initiatives and has the lowest balance sheet leverage among the big four, explains UBS. See also WBC downgrade.

In the bad books: downgrades

29METALS LIMITED ((29M)) was downgraded to Hold from Buy by Ord Minnett and to Sell from Neutral by Citi. B/H/S: 0/3/1

Ord Minnett downgrades 29Metals to Hold from Buy, with the target price lowered to 35c from 75 cents. The company announced a 1-for-1.43 non-renounceable entitlement issue at 27c per share to raise $180m, with Australian Super and BUMA Australia taking up their rights, which would increase their stakes to 18% and 19.9%, respectively, the broker states.

Ord Minnett cuts EPS forecasts by -34% for 2024 and 2025 due to dilution, and the analyst highlights the miner will be cashflow negative for the next two years as it invests in projects.

The raising is intended to fund 29Metals’ copper-zinc Gossan Valley mine in WA. Citi downgrades 29Metals to Sell (High risk) from Neutral (High risk), and the target price is cut to 25c from 45c. The analyst is disappointed $112m of the $180m capital raising is allocated to Gossan Valley instead of strengthening the balance sheet. Gossan is viewed as a “modest” project with sensitivity to commodity prices. Debt issues remain a concern for the broker, with questions surrounding the US$80m due in 2028. Citi estimates there is insufficient capital to restart Capricorn Capital, based on forecasts. Citi cuts 2024 EPS by -11.3%.

CITY CHIC COLLECTIVE LIMITED ((CCX)) was downgraded to Sell from Hold by Bell Potter. B/H/S: 1/0/1

Bell Potter downgrades City Chic Collective to Sell from Hold and halves the target price to 7c from 14 cents. The company provided a 20-week trading update for 1H25 at the AGM, with trading revenue falling -4.8% on the previous year. A&NZ full-price store sales grew 7.5% year-on-year, though the rate of growth had slowed since the start of FY25. US online sales declined further. A&NZ online sales showed some “green shoots” with 3.4% growth. Management pointed to revenue and earnings at the lower end of the FY25 guidance range, though the broker does not believe this can be achieved based on the delay in the company’s recovery. Following the update, Bell Potter has downgraded earnings forecasts by -47% in FY25 and -34% in FY26. Sell rated. Target price 7c.

DE GREY MINING LIMITED ((DEG)) was downgraded to Speculative Hold from Speculative Buy by Bell Potter. B/H/S: 2/1/0

Bell Potter downgrades De Grey Mining to Speculative Hold from Speculative Buy with a lower target price of $1.97 from $2.15. Northern Star Resources ((NST)) and De Grey have agreed to an all-scrip transaction whereby De Grey shareholders receive 0.119 new Northern Star shares, implying a share price value of $2.08 for De Grey shares and valuing the company at $5bn.

The analyst believes the deal is positive for both companies, with De Grey shareholders receiving a premium of 37.1% at the last close while reducing development and finance risk. Northern Star’s balance sheet is robust, with $1.8bn in cash/bullion and $1.5bn in undrawn debt facilities, and in a strong position to develop the Hemi project. The broker believes a competing bid from one of the majors Gold Fields, Barrick Gold, and Newmont Corp ((NEM)) is possible. There is no news regarding Gold Road Resources’ ((GOR)) 17% shareholding in De Grey.

DOMINO’S PIZZA ENTERPRISES LIMITED ((DMP)) was downgraded to Underperform from Neutral by Macquarie. B/H/S: 2/3/1

Macquarie downgrades Domino’s Pizza Enterprises to Underperform from Neutral, with the target price reduced by -8% to $29.50. The analyst highlights ongoing pressures on franchisee profits since FY21, driven by falling revenues. Earnings margins for franchisees have declined to 7.3% from 11.5% post-covid, compared to most managers’ targets of 11%-12%. The average cost per store has remained steady, which Macquarie suggests indicates declining revenue as the primary issue, impacting the ability to support new store openings. Macquarie forecasts below-consensus new store roll-outs and sees medium-term risks to earnings estimates. The analyst reduces EPS forecasts by -0.2% for FY25 and -9.6% for FY26.

GQG PARTNERS INC ((GQG)) was downgraded to Neutral from Buy by UBS. B/H/S: 4/1/0

UBS has downgraded GQG Partners to Neutral from Buy with the broker anticipating a period of cyclical weakness in fund flows ahead for the asset manager. Interestingly, the downgrade is not inspired by the much publicised Adani exposure with which UBS feels “comfortable”. UBS’s research has discovered funds flows into the International Opportunities fund have pretty much ground to a halt recently. The broker also believes positive outperformance over 3-5 year horizons will be somewhat diluted by one-year underperformance as stronger historical performance numbers roll off. Target drops to $2.30 from $3.30. See also GQG upgrade.

IMDEX LIMITED ((IMD)) was downgraded to Neutral from Buy by UBS. B/H/S: 1/3/1

UBS raises its target for Imdex to $2.60 from $2.35 and downgrades to Neutral from Buy on valuation. Significant upside remains should the exploration cycle turn, concede the analysts. Exploration activity has at least stabilised and is potentially modestly improving, notes the broker, after reviewing the company’s recent trading update showing revenues have increased by 3% on 4Q FY24, driven by a 5% increase in sensors on hire.

JUDO CAPITAL HOLDINGS LIMITED ((JDO)) was downgraded to Hold from Add by Morgans. B/H/S: 3/2/1

Morgans reviews the outlook for the banks and expects the November reporting season themes to continue into 1H25. The analyst observes net interest margins were “relatively stable.” Earnings growth was underpinned by hedge portfolios, with higher swap rates being maintained. Competition for assets and deposits slowed, though pressure on deposit mix remains. Morgans forecasts slightly declining net interest margins in the future. Cost growth is expected to remain “solid,” credit loss rates remain low, and the banks retain conservative capital management. Judo Capital is downgraded to Hold from Add. Target price unchanged at $1.92.

NORTHERN STAR RESOURCES LIMITED ((NST)) was downgraded to Neutral from Buy by Citi. B/H/S: 3/2/1

Citi downgrades Northern Star Resources to Neutral from Buy and lowers the target price to $17 from $18.30 due to EPS dilution. The broker highlights the De Grey Mining ((DEG)) acquisition contrasts with Northern Star’s typical bolt-on or asset-turnaround strategy. Citi emphasises Hemi is a Tier 1 greenfields ore body with long-term value accretion and an upgrade to Northern Star’s portfolio. in the near term, risks are weighted against the company due to higher capex/opex and development challenges. The analyst believes the deal detracts from the company’s appeal as a “clean” gold exposure play. Neutral rated. Target price $17.00 from $18.30. Citi’s EPS forecasts are lowered by -4.5% in FY25 and -19.3% in FY26.

QBE INSURANCE GROUP LIMITED ((QBE)) was downgraded to Hold from Buy by Bell Potter. B/H/S: 5/2/0

Bell Potter downgrades QBE Insurance to Hold from Buy due to the strong share price performance. Target price shifts to $19.20 from $19.05. The broker highlights the Q3 trading update revealed growth in gross written premium of 2%, including rate increases of 5.9% and portfolio exits of -2%. Premium rate increases across the group declined to 4.9% from over 8% a year earlier. Management retained 2024 guidance, with catastrophe losses at circa US$950m year-to-date compared to a budget of US$1.28bn for 2024. Hold rated. Target price $19.20.

SG FLEET GROUP LIMITED ((SGF)) was downgraded to Equal weight from Overweight by Morgan Stanley. B/H/S: 1/1/0

SG Fleet has accepted a $3.50/share bid from Private Equity. The stock now trades to probabilities of completion as opposed to fundamentals, Morgan Stanley notes. Super Group holds 53.6% of SG Fleet shares and deal completion does also require Super Group shareholder approval. The Super Group Board unanimously recommends their shareholders vote in favour. The broker now moves to Equal weight from Overweight with a target matching the bid price at $3.50, down from $3.60. Industry view: In Line.

SERVICE STREAM LIMITED ((SSM)) was downgraded to Accumulate from Buy by Ord Minnett. B/H/S: 2/1/0

Service Stream has extended two large programs of work with NBN Co and won a major new water maintenance contract with Urban Utilities in Queensland. The new utilities contract boosts Ord Minnett’s earnings forecasts by 2% in FY26, further extending the duration of work-in-hand. The broker believes this supports an improved margin profile in utilities. Service Stream now has long term contracts with six of Australia’s top ten water authorities, ranked by annual capex. Ord Minnett increases its target to $1.70 from $1.67 but pulls back to Accumulate from Buy ahead of the first half result and further contract news.

WESTPAC BANKING CORPORATION ((WBC)) was downgraded to Reduce from Hold by Morgans. B/H/S: 1/2/3

Morgans reviews the outlook for the banks and expects the November reporting season themes to continue into 1H25. The analyst observes net interest margins were “relatively stable.” Earnings growth was underpinned by hedge portfolios, with higher swap rates being maintained. Competition for assets and deposits slowed, though pressure on deposit mix remains. Morgans forecasts slightly declining net interest margins in the future. Cost growth is expected to remain “solid,” credit loss rates remain low, and the banks retain conservative capital management. Westpac is downgraded to Reduce from Hold. Target price lifts to $27.77 from $27.66. See also WBC upgrade.

Earnings forecast

Listed below are the companies that have had their forecast current year earnings raised or lowered by the brokers last week. The qualification is that the stock must be covered by at least two brokers. The table shows the previous forecast on an earnings per share basis, the new forecast, and the percentage change.