Last week there were five upgrades and eight downgrades to ASX listed companies
DroneShield received upgrades to Buy from Hold via both Bell Potter and Shaw and Partners due to a stronger-than-expected cash flow performance in the first half of 2025.
Primarily driven by higher customer receipts and lower-than-anticipated inventory levels, operating cash outflow of -$4.4m compared to Bell Potter’s -$25.5m forecast and investing cash outflow of -$11.9m came in below the anticipated -$16.7m.
Management appears well placed to maintain its strong performance, with $176.3m in revenue already secured for delivery in 2025 as of July 22, around 90% of the broker’s full-year forecast of $195.4m.
Shaw now views the business as having passed a key inflection point, shifting from capex-heavy to cash generative, supported by scale, a light balance sheet, and clear revenue visibility.
Whitehaven Coal receives two downgrades
Whitehaven Coal received two downgrades to Hold (or equivalent) from Buy following its June quarterly operational result.
While the coal producer met run-of-mine (ROM) production and coal sales guidance, with Queensland ROM output exceeding expectations, Bell Potter downgraded its rating following a rally in the share price.
Citi downgraded for the same reason, noting June quarter production and costs were strong, with FY25 cost guidance of $139/t beating the $140–155/t guidance range, while saleable production of 7.76mt proved 9% above the broker’s estimate.
Mixed revisions to target prices and earnings
Last week’s average target price revisions were relatively balanced between upgrades and downgrades, as reflected in the tables below. In contrast, the magnitude of downward earnings forecast revisions significantly outweighed the extent of upgrades.
Boss Energy received the largest percentage decrease in average target from brokers after FY26 guidance (issued as part of the June quarter update) raised doubts over the ability of its Honeymoon mine to reach nameplate capacity, clouding the outlook and raising valuation concerns.
Morgan Stanley suggested uncertainty will continue to weigh heavily on the stock price, given the absence of a clear timeline for when independent experts will begin or complete their review of Honeymoon.
Healius saw its average target fall -12% following Citi’s target cut to 85c from $1.05. The broker applied more conservative margin assumptions despite modest expansion in collection centre numbers, up 1% since December and 2% year-on-year.
Flight Centre and Champion Iron impacted by earnings downgrades
Flight Centre Travel and Champion Iron also appear in the list for negative change to average price target with falls of circa -10% and -8%, respectively.
Flight Centre downgraded FY25 underlying profit guidance by -9% at the midpoint, which reflects volatile trading conditions, according to Macquarie, as well as ongoing underperformance in Asia over the second half of FY25.
Unfortunately, the analyst at Morgans expects the first half of FY26 will remain challenging for the travel agent, with time needed for internal business initiatives to take effect and improve profitability.
For Champion Iron, Citi attributed a weaker-than-expected first quarter FY26 result to elevated costs and lower recoveries.
The disappointment for Macquarie, which downgraded to Neutral from Outperform, was on the cost side, which was -10% worse than the broker’s estimate and contributed to a -44% miss against the broker’s earnings forecast.
Paladin Energy and Stanmore Resources results underwhelm
Paladin Energy again managed to disappoint the market. While Langer Heinrich delivered a strong June quarter operationally, with production up 33% quarter-on-quarter, well ahead of the consensus forecast, Ord Minnett noted this performance was overshadowed by a disappointing average realised U3O8 price, nearly -20% below both spot and consensus expectations.
Wet weather impacted Stanmore Resources’ fourth quarter results, with saleable coal production below Citi’s forecast by -7% and coal sales a -3% miss.
Nonetheless, Stanmore remains Ord Minnett’s preferred exposure to leverage on metallurgical coal, which accounts for around 97% of the miner’s revenue.
Earnings forecast increases for Newmont, Bubs, and Regal
Turning to rises in average earnings forecasts, Newmont Corp and Bubs Australia sit atop the week’s table with respective 24% and 23% increases last week following better-than-expected June quarter results.
Newmont Corp announced “robust” quarterly gold production, according to Macquarie, which came in 6% above the consensus expectation. All-in-sustaining costs were also lower, resulting in better-than-forecast earnings and free cash flow.
Management reconfirmed 2025 guidance, which appeared conservative to the analyst at UBS. The miner also announced an additional US$3bn share buyback program.
For Bubs Australia, guidance for FY25 earnings of between $5.5–6.0m, which included a $3.6m settlement benefit, exceeded Shaw’s $2.5m forecast, with June quarter earnings of $4.3m marking a sharp year-on-year recovery.
Gross margin for FY25 came in at 47.2%, slightly below FY24 but above the broker’s FY26 forecast, despite ongoing uncertainty around US tariffs. Bell Potter noted operating and net cash improved during the quarter, with the $17.4m balance for net cash comparing to $12.5m at the end of quarter three.
Investment manager Regal Partners also appears on the earnings upgrade table following a positive update ahead of interim results on August 25. Regal experienced an increase in fee-generating funds under management (FUM) during the June quarter and management now expects a normalised profit of at least $40m for FY25, exceeding the previous consensus forecast of $34.6m.
The increase in FUM came in 9% ahead of Ord Minnett’s forecast driven by strong gains in Regal’s long-short equity strategy, largely reflecting investment performance. Performance fees also rebounded.
Bell Potter stated shares of Regal are undervalued.
In the good books
Upgrades
AERIS RESOURCES LIMITED ((AIS)) was upgraded to Speculative Buy from Hold by Ord Minnett .B/H/S: 3/0/0
Aeris Resources is upgraded to Speculative Buy from Hold by Ord Minnett, with a target set at 28c, up from 23c.
A recent site visit highlighted a new strategy by management to deliver value for shareholders via growth at Tritton, which is viewed by the analyst as a positive move.
Commentary suggests the proof will be in the operational realisation, with successful asset sales and a reduction in debt.
Management also provided FY26 guidance for copper equivalent production of 40-49kt, as well as higher capex of over -$49m, Ord Minnett forecasts.
The higher spend is likely to suppress cash flows in 1H26, with the delivery of the Murra open pit expected to contribute copper production in 2H26.
DRONESHIELD LIMITED ((DRO)) was upgraded to Buy from Hold by Bell Potter and to Buy from Hold by Shaw and Partners .B/H/S: 2/0/0
The highlight of DroneShield’s 2Q25 update was an improved cash flow, with operating cash outflow of -$4.4m significantly higher than Bell Potter’s forecast and investing cash flow also beating estimates.
The outcome was attributed to higher customer receipts and lower-than-expected inventory. Revenue in the 1H was largely in line with the broker’s estimate.
The company’s contracted revenue for FY25 is already at 90% of the broker’s forecast, with sales pipeline at a robust $2.3bn.
No major changes to forecasts. Target unchanged at $3.80. Rating upgraded to Buy from Hold.
Shaw and Partners upgrades DroneShield to Buy from Hold, with the target price rising to $3.60 from $2, as the company’s 4C update has offered confirmation to the analyst that it has crossed an important threshold towards generating free cash flow.
In the June quarter, the company’s net operating cash came in at $13.4m, with liquidity around $204m and no debt. The analyst observes the cost base is growing due to baseline fixed opex rising to circa $8.5m per month, up from $6.5m in the prior quarter, with the scaling of employees and facilities.
Headcount now stands at 363, including 285 engineers, and manufacturing capacity is being scaled to $2.4bn annually from $0.5bn. DroneShield has a sales pipeline of $2.33bn across 284 live opportunities, notes the broker.
Shaw and Partners lifts its earnings estimates by 15% and 20% for FY25 and FY26, respectively.
JAMES HARDIE INDUSTRIES PLC ((JHX)) was upgraded to Outperform from Neutral by Macquarie .B/H/S: 4/2/0
Macquarie has taken a forward-looking approach to James Hardie Industries following the completion of Azek acquisition, highlighting the underlying economics of Azek’s product is attractive. The broker sees big opportunity from Azek’s supply chain.
The broker has now factored in 50% of the commercial synergies, largely related to cross-sell oriented opportunities. The company’s debt position is a key risk but the broker expects rapid deleveraging, reaching 2.4x ND/EBITDA in FY27 and 1.6x in FY28 from 3.3x in FY26.
EPS forecasts cut by -16% for FY26 and by -12% for FY27 on dilutionary impact of the Azek deal.
Target rises to $46.80 from $39.80 on revisions to valuation multiples. Rating upgraded to Outperform from Neutral.
MINERAL RESOURCES LIMITED ((MIN)) was upgraded to Hold from Trim by Morgans .B/H/S: 3/3/1
Morgans upgrades Mineral Resources to Hold from Trim, with a rise in the target price to $31 from $30 previously, as the company’s FY25 guidance met expectations across all segments, the analyst highlights.
Importantly, Onslow is on track to reach nameplate capacity in 1Q26, and net debt is anticipated to be around $5.35bn at the end of FY25.
Iron ore unit costs for FY25 were at the lower end of guidance for both Onslow and the Pilbara Hub, with lithium costs at the midpoint of guidance. Repairs on the Onslow haul road are on track for completion over 1Q26.
Morgans is positive that Mineral Resources can continue to de-gear the balance sheet and that the new board appointments can address governance issues.
See also MIN downgrade.
In the bad books
Downgrades
CHAMPION IRON LIMITED ((CIA)) was downgraded to Neutral from Outperform by Macquarie .B/H/S: 2/1/0
Champion Iron’s 1Q26 production missed Macquarie and consensus forecasts by an average -5% but shipments beat the consensus on higher inventory drawdown.
The disappointment was on the cost side which was 10% higher than the broker’s estimate and contributed to the -44% miss to the EBITDA forecast. Net debt was in line due to CA$36m proceeds from warrants.
The broker made significant cuts to FY26-28 EPS forecasts on higher costs and share count.
Target cut to $5.00 from $5.60. Rating downgraded to Neutral from Outperform.
FORTESCUE LIMITED ((FMG)) was downgraded to Sell from Neutral by UBS .B/H/S: 2/3/2
Fortescue Metals delivered a stronger-than-expected June quarter, according to UBS, capping off a record FY25 with 198.4mt in shipments and C1 costs of US$17.99/t, -6% below consensus.
FY26 guidance implies to the broker modest shipment growth (195–205mt), creeping operating costs, and a lift in sustaining and decarbonisation capex to -$3.6-4.3bn, offset partly by a reduced energy capex profile.
Iron Bridge shipments were 30% above consensus in the quarter, highlight the analysts, and the balance sheet remains strong with net debt of US$1.1bn versus consensus of US$1.9bn.
UBS downgrades to Sell from Neutral, while raising its price target to $17.40 from $16.20. Recent share price gains and a softer iron ore outlook drive the broker’s valuation caution.
GQG PARTNERS INC ((GQG)) was downgraded to Hold from Buy by Morgans .B/H/S: 4/1/0
Morgans lowered its rating on GQG Partners to Hold from Buy to reflect the risk of negative net flows given recent investment underperformance.
Target price is cut to $2.10 from $2.65 mainly due to the broker applying temporary discount to align with the downgraded rating.
At the same time, the broker has flagged the potential for index buying demand if the likely index inclusion (ASX200/300) under proposed S&P changes after September 19 close materialises.
At the upcoming 1H25 results, the broker expects underlying net profit of US$218.1m, up 8.4% y/y but down -5.2% sequentially. Focus will be on commentary around flows.
HELLOWORLD TRAVEL LIMITED ((HLO)) was downgraded to Hold from Buy by Ord Minnett .B/H/S: 1/2/0
Ord Minnett downgrades Helloworld Travel to Hold from Buy due to the robust rally in the share price. Target slips to $1.76 from $1.93.
The company announced a trading update and FY25 guidance, with the earnings (EBITDA) range rising to $58m–$62m from $52m–$56m, which includes a $5.2m revaluation of Webjet Group ((WJL)) shares held.
Total travel volumes declined on a year earlier due to “marginally lower customer numbers, changes in destination mix to short-haul vs long-haul destinations, and lower airfares”.
The broker estimates cash on hand at FY25-end at around $88m, with holdings in Corporate Travel Management ((CTD)) and Webjet supporting the balance sheet by around $11m and $54m, respectively.
Ord Minnett lowers its FY25 EPS forecast by -7% and by -2% for FY26.
MINERAL RESOURCES LIMITED ((MIN)) was downgraded to Underperform from Neutral by Macquarie .B/H/S: 3/3/1
Macquarie downgrades Mineral Resources to Underperform from Neutral. Target price rises to $29 from $22 on improved lithium costs and earnings outlook.
The analyst highlights risks around the Pilbara Hub, which is viewed as under threat if iron ore prices fall below US$90/t, as forecast by the broker over FY26/FY27.
The 4Q25 report showed across-the-board better-than-expected results, with Onslow shipments above by 4%, Pilbara Hub by 5%, Mt Marion by 6%, and Wodgina by 4%. FY25 guidance for Onslow was in line with the analyst’s forecast.
Net debt came in $0.2bn better than anticipated, and management pointed to FY26 capex of around -$1bn.
Macquarie lifts its EPS estimate by 24% for FY25 and lowers FY26 by -20%.
See also MIN upgrade.
MACQUARIE GROUP LIMITED ((MQG)) was downgraded to Hold from Accumulate by Morgans .B/H/S: 1/4/0
Macquarie Group’s 1Q26 group net profit contribution was down year-on-year, highlights Morgans, reflecting weaker-than-expected earnings.
Improved results in Banking and Financial Services and Macquarie Capital were offset by lower contributions from Asset Management (MAM) and Commodities & Global Markets, explains the analyst.
Management maintained FY26 guidance, though Morgans flags the need for a stronger second half to meet the $4.1bn profit consensus estimate, which implies 12% growth.
CFO Alex Harvey will step down at the end of December, a loss in the broker’s opinion, given his market reputation and succession potential.
According to Morgans, key operational highlights include 1% growth in MAM assets under management (AUM), $23.5bn in private market dry powder, and 6% sequential growth in the $150bn home loan portfolio.
The analyst also highlights a weaker commodities trading performance, and strong advisory fee income, especially in North America.
Morgans lowers its price target marginally to $222.87 from $223.89. The rating is downgraded to Hold from Accumulate on valuation.
WHITEHAVEN COAL LIMITED ((WHC)) was downgraded to Neutral from Buy by Citi and to Hold from Buy by Bell Potter .B/H/S: 3/4/0
After a deeper analysis of Whitehaven Coal’s June quarter report, Citi concluded production and costs beat expectations but operations free cash flow was lower than expected.
The broker cut underlying EBITDA forecast for FY25 by -14% and lifted FY26 by 1.6%. Target price rises to $7.10 from $7.00. Rating downgraded to Neutral from Buy.
Whitehaven Coal reported a strong quarterly rebound, suggests Bell Potter, with managed run-of-mine (ROM) production of 10.6mt (versus 9.5mt expected by the broker) and saleable production of 7.8mt against 7.9mt forecast.
Equity sales of 6.0mt were below the broker’s 6.5mt forecast due to shipping delays from poor weather, though Maules Creek delivered well on thermal coal output.
FY25 guidance was met, highlight the analysts, with group production and sales reaching the upper end of the range, and both unit costs and capex coming in below guidance.
The company ended FY25 with net debt of $0.6bn after the first -US$500m payment for the BMA acquisition. FY26 guidance, due August 21, will likely include stronger Narrabri volumes and lower unit costs, suggest the analysts.
Bell Potter lowers its target price to $6.90 from $7.10 and downgrades to Hold from Buy.
Earnings forecast
Listed 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.
