In the week ending Friday, June 13, 2025, FNArena tracked four upgrades and six downgrades for ASX-listed companies from brokers monitored daily.
Beach Energy received two ratings downgrades from separate brokers. Shares have rallied by around 10% since the company released quarterly results in April, but Morgans last week warned earnings remain vulnerable ahead of the June quarter result, given likely consensus downgrades and already weak sentiment.
With Waitsia Stage 2 in the Perth Basin now in a critical commissioning phase, despite consensus expecting full production by September, and Cooper Basin operations disrupted by severe fourth-quarter flooding, the broker cut its target to $1.36 from $1.55 and downgraded its rating to Hold from Accumulate.
UBS also downgraded Beach to Neutral from Buy, trimming its target to $1.35 from $1.40, citing elevated risks of further commissioning delays at the Waitsia gas plant.
Among covered Energy names, this broker now ranks Beach Energy behind Santos (top pick) and Woodside Energy in order of preference.
On a more positive note, UBS highlighted Beach’s strong balance sheet, giving the Board flexibility to exceed its stated dividend policy.
Turning to average target prices and earnings forecasts, here the tables below show rises and falls were broadly even last week.
After announcing the closure of loss-making Jetstar Asia, Qantas Airways received an around 8% lift in average target from brokers, with Macquarie suggesting the move will generate additional earnings before interest and tax of around $47m by FY27.
Flights will be shut down as of July 31, impacting 16 intra-Asia routes, but will not affect Jetstar Airways international flights from Australia to Asia or the Japanese business.
Some aircraft will be re-deployed to higher-return markets in A&NZ, freeing up to $500m in capital and supporting broader fleet renewal initiatives, highlighted Morgans.
Management also reiterated FY25 and FY26 capex guidance, with some of the capex benefits expected to flow through over FY27 and FY28. Post covid, it’s felt the airline is better equipped to manage its international network and improve return on capital employed.
Online furniture and homewares retailer Temple & Webster and Catapult International (sports technology) were next with rises in average targets of around 6% apiece.
Ord Minnett raised its target for Temple & Webster to $20 from $14 after reviewing its financial model but retained a Sell rating due to valuation concerns.
The company has proven its business model, suggested the analyst, whereby manufacturers and suppliers ship directly to Temple & Webster customers, obviating the need to hold inventory of furniture and homewares.
Regarding the Sell rating, here Ord Minnett explained Temple & Webster remains a relatively minor player in the business-to-business (B2B) and home improvement segments, which are expected to contribute less than $50m in revenue in FY25.
The broker believes the market is pricing in substantial growth in these categories, despite limited evidence of successful expansion among domestic or international peers. Moreover, assumptions around maintaining margins at scale and facing limited competitive pressure are viewed as optimistic and unlikely to hold in practice.
Following the recent acquisition of US-based Perch for initial consideration of -US$18m, Bell Potter raised its target for Catapult by $1.00 to $6.00. The increase was partly due to higher earnings forecasts and a higher assumed valuation multiple due to the large cross-sell opportunity via Perch, as well as the ongoing rally in the technology sector.
Perch is a “next generation leader in athlete monitoring in the gym for elite teams” and will fit into or enhance Catapult’s Performance & Health (P&H) or Wearables vertical, in the broker’s opinion.
Zip Co also had a good week, heading up the earnings upgrade table below, after management raised FY25 cash earnings guidance to $160m from $153m, due to a stronger-than-expected US performance in both April and May.
During these months Zip generated 40% year-on-year growth in Total Transaction Volume (TTV). Despite accelerating customer acquisition, Citi noted credit performance remained steady, which is expected to support re-investment in marketing to drive further growth.
Lower fuel prices and interest rate cuts could deliver a further 5-10% earnings uplift, forecasts UBS, with each -25bps cut estimated to add around $5m to earnings.
Coronado Global Resources appears atop the tables for negative change to earnings and target. To alleviate immediate working capital risks during the current weaker coal price environment, and while costs remain elevated, management has announced measures to improve its cash liquidity position by up to US$400m.
In addition to the previously announced US$100m cost reduction target throughout 2025, the company recently entered a binding agreement with Oaktree Capital Management to refinance its US$150m Asset Based Lending facility.
Last week, management also agreed with Stanwell Corporation to provide a liquidity benefit of up to US$150m through a thermal coal pre-payment and rebate deferral.
According to Bell Potter, unless coal prices improve materially, Coronado may need to implement additional liquidity measures over the coming quarters. The broker’s target was cut to 19c from 23c, and a Speculative Hold rating was kept.
Macquarie (Neutral) lowered its target price by- 24% to 19c, partly reflecting a weakened earnings outlook and a higher cost of debt.
Perennial disappointer Domino’s Pizza Enterprises was downgraded to Equal-weight from Overweight at Morgan Stanley. It’s thought a shift in consumers’ perception of value within the quick service restaurant (QSR) space is causing structural headwinds to build for traditional players.
The customer is trending toward healthier options, convenience (sometimes via Uber Eats), and enhanced digital experiences, notes the broker. It’s thought some QSR operators with more sophisticated apps and loyalty programs are gaining a competitive advantage.
In the good books
Upgrades
METCASH LIMITED ((MTS)) was upgraded to Outperform from Neutral by Macquarie .B/H/S: 4/1/0
Macquarie raises its target for Metcash by 40 cents to $3.70 and upgrades to Outperform from Neutral after FY25 hardware earnings (EBIT) guidance (via a trading update) came in around 4% ahead of expectations.
This outcome alleviates concerns for the analyst around segment de-leverage and marks a likely trough in earnings. The broker expects the merger of IHG and Total Tools to deliver medium-to long-term upside through improved cost control, stronger supplier terms, and cross-brand integration. For the short-term, the earnings impact is expected to be limited.
Hardware recovery is anticipated, supported by improving housing approvals, commencements, and home sales, alongside expectations of three further RBA rate cuts in 2025.
QANTAS AIRWAYS LIMITED ((QAN)) was upgraded to Hold from Trim by Morgans .B/H/S: 2/4/0
Qantas Airways has announced the closure of Jetstar Asia, citing unsustainable supplier cost increases, high airport charges, and intensifying competition.
Jetstar Asia is expected to post a -$35m EBIT loss in FY25, with -$25m of this occurring in H2, notes Morgans. Qantas anticipates one-off closure costs of around -$175m, mostly incurred in FY26.
Aircraft from Jetstar Asia will be redeployed to higher-return markets in A&NZ, freeing up to $500m in capital and supporting broader fleet renewal initiatives, highlights Morgans.
The broker views the absence of formal FY25 guidance as an indication Qantas is broadly comfortable with consensus expectations. Morgans leaves FY25 forecasts largely unchanged but lifts FY26 and FY27 profit (NPBT) forecasts by 4% on lower fuel assumptions, noting an additional 5-10% upside if spot prices persist.
The target price increases to $10.80 from $9.40 and the broker upgrades its rating to Hold from Trim.
REDOX LIMITED ((RDX)) was upgraded to Accumulate from Hold by Ord Minnett .B/H/S: 3/0/0
Ord Minnett upgrades Redox to Accumulate from Hold on valuation grounds, with a new target price of $2.68 from $2.85.
In response to an ASX query about the share price last week, the company cited “broader macro uncertainty”, with a lack of confidence in the Australian economy post the 1Q25 GDP print, the analyst details.
Lower confidence levels and activity levels in the domestic economy have led Ord Minnett to reduce earnings estimates by around -6% for FY25 and -5% for both FY26/F27.
The macroeconomic impacts are viewed by the broker as cyclical rather than structural issues for the company.
SEEK LIMITED ((SEK)) Re-initiation of coverage with Buy by Citi .B/H/S: 7/0/0
After around six years, Citi has re-initiated coverage of Seek with a Buy rating, but with a downside view in the short term. Target price is $28.50.
The broker compares the company’s AI use to REA Group ((REA)) and Car Group ((CAR)), noting it is ahead in its use to improve product offering and customer experience.
The analyst is forecasting the ad-tier model to accelerate yield growth with a 10% forecast for FY26, higher than the company’s high-single digit forecast. While rate cuts are a positive, other leading indicators are mixed, and the broker expects volume recovery to come only in 2H26.
In Asia, the broker expects growth to be weighed down by freemium roll-out in Hong Kong and Malaysia, but to pick up over the medium term.
The broker’s FY25 revenue forecast is in line with consensus, but -2% below for FY26.
In the bad books
Downgrades
BEACH ENERGY LIMITED ((BPT)) was downgraded to Neutral from Buy by UBS and to Hold from Accumulate by Morgans .B/H/S: 0/5/2
UBS lowers its target price for Beach Energy to $1.35 from $1.40 and downgrades the rating to Neutral from Buy due to softer domestic gas price forecasts and limited near-term catalysts.
The broker feels recent share price gains have priced in a timely ramp-up at Waitsia. Balance is also now seen between upside from rising East coast gas prices and downside from potential delays and softer domestic demand.
Over 40% of Beach’s East coast gas is uncontracted from FY26, creating leverage to future price rises, note the analysts. However, the broker’s FY26-27 East coast gas price assumptions are lowered by -5-6% due to delays in LNG import terminal commissioning.
UBS also flags commissioning risks for the Waitsia Gas Plant despite fuel gas being introduced in May, and sees no further discount priced into shares for delays.
Cost guidance remains unchanged, and production expectations for FY26-27 are steady, notes UBS.
Morgans lowers its target for Beach Energy to $1.36 from $1.55 and downgrades to Hold from Accumulate ahead of June quarter results, citing near-term risks which could lead to consensus downgrades.
The broker sees the market as overly optimistic on both the timeline for the Waitsia Stage 2 ramp-up and production recovery in the Cooper Basin. For the latter, flooding has impacted operations more significantly than consensus reflects.
While the introduction of first fuel gas at Waitsia occurred in mid-May, Bell Potter expects nameplate production won’t be achieved until November, assuming a smooth 10-12 week commissioning phase and further ramp-up.
CETTIRE LIMITED ((CTT)) was downgraded to Speculative Sell from Speculative Hold by Bell Potter .B/H/S: 0/0/2
Cettire delivered FY25 to-date revenue of $693.8m, up 1.7% year-on-year, but with adjusted earnings (EBITDA) of just $0.5m, well below consensus at $7.8m, notes Bell Potter.
April-May trading was notably weaker, observe the analysts, with sales down -21% year-on-year and an adjusted -$6.9m earnings loss, including -$2m in currency losses. Cash fell to $45m from $76m at the end of the third quarter.
The broker downgrades its earnings forecasts, now expecting a -20% revenue decline in the June quarter and only modest growth of 3-12% over FY26-27.
A return to EBITDA profitability is now expected in the third quarter of FY26, one quarter later than the analysts had previously anticipated.
Bell Potter cuts its price target to 28c from 47.5c and downgrades to Speculative Sell from Speculative Hold.
DOMINO’S PIZZA ENTERPRISES LIMITED ((DMP)) was downgraded to Equal-weight from Overweight by Morgan Stanley .B/H/S: 0/6/0
Morgan Stanley notes Domino’s Pizza Enterprises’ failed to meet its same-store sales outlook of 3-6% growth over FY22-24 and is set to miss it once again in FY25.
The broker now considers the underperformance as a structural shift rather than a post-covid reconfiguration. As a result, the analyst has lowered its medium-term same-store sales and network growth forecasts to 1-3%. This led to a downgrade to FY26-29 top-line growth forecasts to an average 3.4% from 5.4% before.
For the longer term, the broker cut top-line growth forecasts to 3.5% from 4.0%. Rating downgraded to Equal-weight from Overweight. Target cut to $24.
JOHNS LYNG GROUP LIMITED ((JLG)) was downgraded to Hold from Accumulate by Morgans .B/H/S: 1/4/0
Management at Johns Lyng has received a non-binding indicative proposal from Pacific Equity Partners to acquire 100% of shares in the company, with both parties entering into an exclusivity period to undertake due diligence.
Separately, Johns Lyng’s 1H25 result was weaker-than-expected by Morgans, with group revenue missing the analyst’s forecast by -6% and earnings (EBITDA) coming -18% below. The interim dividend of 2.5c was also lower than the broker’s 4.2c forecast.
Management cut FY25 earnings guidance by -5% which implies to the broker a 2H recovery in business as usual (BAU) earnings. Based on the company’s update, Morgans expects improved revenue momentum from recent surge events in NSW and Queensland.
In the US, volumes are expected to increase with a new client onboarding and work related to LA wildfires but it is still expected to fall short of the company’s FY25 target of 10-15% revenue growth, highlights the broker.
WAGNERS HOLDING CO. LIMITED ((WGN)) was downgraded to Accumulate from Buy by Morgans .B/H/S: 1/0/0
Morgans expects heavy rainfall across South East Queensland in March to moderately impact Wagners Holding Co’s 2H25 earnings, with Brisbane recording 461mm in the month, more than double the 10-year average.
The broker has revised its FY25 EPS forecast down by -8%, while FY26 and FY27 are adjusted by -1% and 0% respectively.
The analyst explains maintenance in January and a concentration of public holidays will act as an additional drag on near-term performance.
Morgans views the cement market as stabilising, supported by recent price rises and improved discipline across the industry.
The broker raises its target price to $2.10 from $2.00 due to a higher assumed multiple (reflecting longer-term optimism around Brisbane Olympics-related infrastructure spend), and downgrades to an Accumulate rating from Buy.
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.
