The recent prevailing trend has been ongoing downgrades of earnings forecasts by analysts for stocks in the mining sector, with the notable exception of gold companies, as the price of the yellow metal continues to rise. These downgrades have largely stemmed from negative sector reports issued by broking houses, which have either revised commodity forecasts downward or marked-to-market prior commodity price declines.

Last week, the release of December’s quarterly operational updates brought this trend into sharp focus, with commodity-related stocks accounting for nine of the ten earnings forecast downgrades shown in the table below.

True to form for gold miners, Regis Resources appears second on the list for largest forecast earnings upgrades after a positive quarterly update, and brokers raised price targets for Evolution Mining, resulting in Macquarie and Citi downgrading their ratings due to valuation concerns as the share price approaches an all-time high.

In contrast to last week’s fall in average earnings forecasts, increases in average target prices outpaced declines.

HMC Capital ranked second on the list of positive target price changes and received rating upgrades from two separate brokers.

In research written late last year, Bell Potter raised its target for HMC to $13.50 from $9.05 and upgraded to Buy from Hold, citing a first-half boost from data centres and the recent Neoen acquisition.

Positioning as a significant player in Australia’s renewable energy sector, HMC acquired Neoen’s Victorian renewable energy portfolio for -$950m, which includes four operational assets totalling 652 MW and six development projects with a combined capacity exceeding 2,800 MW.

Bell Potter also noted HMC is creating potential for additional fee-earning capability, with the company’s platform now reaching optimal scale and breadth. Additionally, funds under management have increased to $19bn following the DigiCo Infrastructure REIT listing, noted the analysts.

Last week, as part of a property sector review, Ord Minnett also raised its target for HMC to $9.15 from $6.50 and upgraded to Hold from Sell.

Insignia Financial leads the table for positive target price changes, following a better-than-expected second-quarter update, which saw group funds under management and administration (FUMA) increase by 2.2% to $326.8bn. Net flows of $2.3bn, excluding pension payments, marked a significant improvement from the first quarter, highlighted Ord Minnett.

The broker increased its earnings forecasts by 2-3%, reflecting the strength of the update and factoring in a corporate appeal premium into its valuation.

This premium reflects two active acquisition proposals which Ord Minnett deems both credible and worth considering. Suitor Bain Capital raised its offer to $4.60 per share, aligning with CC Capital’s revised bid.

Other companies to receive materially positive changes to average targets from brokers last week were Generation Development, Hub24 and Bubs Australia.

Morgans upgraded its rating for specialist provider of innovative tax-effective investment solutions, Generation Development, to Add from Hold with a target of $4.75, up from $4.01. These changes followed a “very strong” December quarter update, which included record investment bond sales of $250m.

Generation Development owns Generation Life, which markets Investment Bonds and Annuities, and as of last August, holds full ownership of Lonsec (encompassing Managed Accounts and Research) after increasing its stake from the initial 37% acquired in September 2020.

Recent momentum looks to be improving for the company, off an already high base, noted Ord Minnett, and adviser interest across the product suite also appears very buoyant.

Lonsec’s funds under management growth of 8.3% over the period also outperformed Ord Minnet’s expectations and the analysts raised their target price.

Analysts at Morgan Stanley recently stated Generation Development could be the next Hub24, a notable suggestion considering Hub24’s near eightfold share price increase over the last five years.

The average target price for Bubs Australia received a boost in the FNArena database last week after Ord Minnett initiated research coverage with a 20c target, joining Citi and Bell Potter with respective targets of 13 cents and 14.5 cents.

Ord Minnett highlighted potential for sustainable long-term growth, pointing to a promising turnaround story for 2025, supported by a new management team led by CEO Reg Weine, which has stabilised the business and driven 32% sales growth from FY23 to FY24.

Bubs’ core goat-based infant milk formula products generate strong demand and over 40% gross margins, noted the analysts, with the US market now being its largest growth driver.

Citi also expressed optimism following last week’s quarterly activities and cash flow reports, noting positive momentum across all regions. group-level margins of 48% exceeding the broker’s 40% forecast.

Along with the material rise in average target, Bubs Australia sits atop the earnings upgrade table, followed by Patriot Metals which recently benefited from Volkswagen Group’s investment to acquire a 9.9% shareholding and a binding offtake agreement for the supply of spodumene concentrate from Patriot’s Shaakichiuwaanaan project over 10 years.

Looking at less favourable developments last week, Megaport received the largest negative percentage change to target price after Citi lowered its target to $9.00 from $16.05 following a review of its investment thesis, which involved lower growth and increased cost growth assumptions.

This broker reiterated its Buy rating, pointing to a recent step-up in hiring as a sign things are tracking in-line with management’s guidance. New data centres and products are also expected to drive growth, and the analysts see potential for a FY26 growth surprise as AI inference workloads pick-up with Enterprise adoption.

Coronado Global Resources follows with a -9% decline in average target price, as weak steel demand continued to weigh on activities in the December quarter, explained Morgans, which currently maintains a Speculative Buy rating. Alas, for the miner, metallurgical coal markets remain weak, but Buy-rated UBS maintains the faith, expecting a market improvement in one- or two-years’ time.

In the good books: upgrades

ANZ GROUP HOLDINGS LIMITED ((ANZ)) was upgraded to Neutral from Underperform by Macquarie. B/H/S: 0/4/2

Following a review of banking stocks, Macquarie has retained its underweight sector call due mainly to highly stretched valuations. Given the anaemic earnings growth outlook, the broker struggles to get bullish at current levels, even after incorporating more favourable trends. The broker has incorporated short-term margin trends and a better-than-expected economic backdrop which has driven pre-provision upgrades of 3-5% in FY25 and 0-3% in FY26. In the case of ANZ, following its -8-30% relative underperformance vs peers over the last 12 months, and the unlikely risk to numbers in FY25, Macquarie has “tactically” upgraded the bank to Neutral from an Underperform recommendation. Target price increases to $28.0 from $26.5.

CENTURIA CAPITAL GROUP ((CNI)) was upgraded to Accumulate from Hold by Ord Minnett. B/H/S: 3/1/1

Ord Minnett has reviewed the property sector earnings forecasts, considering expectations commercial property is at the bottom of the cycle, while residential remains challenged. The broker expects an uptick in retail rental growth on sales estimates of 2%-3% in 2025 with an increase in average daily office attendance to almost four days a week and believes national office vacancy rates have topped out near 18%. Regarding logistics, the broker points to a slowdown in demand and landlords’ incentives offering discounts of between -15% to -20%. Vacancy rates are forecast to peak at 3%-4%, with book value write-downs of -5% for logistics. Residential will continue to be challenged by high rates, the analyst notes, and affordability remains an issue.

Ord Minnett’s top picks in the sector are Dexus, Scentre Group, Vicinity Centres, and Goodman Group, with a preference for Charter Hall Social, Growthpoint, and Arena in the smaller REIT cap space. Centuria Capital is upgraded to Accumulate from Hold with a $2 target price.

CSL LIMITED ((CSL)) was upgraded to Buy from Accumulate by Ord Minnett. B/H/S: 6/0/0

Ord Minnett upgrades CSL to Buy from Accumulate, with the stock sitting -11% below its 2024 high. The broker highlights the latest US data on influenza and vaccine distribution from the US Centres for Disease Control and Prevention. Volumes of vaccines distributed fell -7% year-on-year and remain -25% below covid highs. The US immunisation rate has dropped to 42%, where it was 10 years ago, the analyst states. Management’s Seqirus revenue guidance for FY25 was “flattish” and Ord Minnett forecasts total revenue growth of 2%, with some potential benefit from the recent Avian H5N1 bird flu. Behring’s outlook is viewed as “bright” by the broker, with lower collection costs, price increases, and improved production efficiency. Target price remains unchanged at $318.

GENERATION DEVELOPMENT GROUP LIMITED ((GDG)) was upgraded to Add from Hold by Morgans. B/H/S: 3/0/0

Morgans has upgraded Generation Development to Add from Hold with an increased price target to $4.75 from $4.01 following a “very strong” Q2 update, which included record investment bond sales of $250m. The latter represents the third consecutive record quarter for the company, the broker highlights. Morgans says Generation Development is a great story, and management has executed well. The broker has upgraded forecasts, but also longer-term growth assumptions.

HMC CAPITAL LIMITED ((HMC)) was upgraded to Buy from Hold by Bell Potter and to hold from Sell by Ord Minnett. B/H/S: 2/4/0

In research penned on 19 December last year, Bell Potter raised its target for HMC Capital to $13.50 from $9.05 and upgraded to Buy from Hold, citing a first-half boost from data centres and the recent Neoen acquisition. The broker believes the platform is reaching optimal scale and breadth, creating potential for additional fee-earning capability. Funds under management (FUM) have increased to $19bn following the DigiCo Infrastructure REIT ((DGT)) listing, noted the analysts.

Ord Minnett has reviewed the property sector earnings forecasts, considering expectations commercial property is at the bottom of the cycle, while residential remains challenged. The broker expects an uptick in retail rental growth on sales estimates of 2%-3% in 2025 with an increase in average daily office attendance to almost four days a week and believes national office vacancy rates have topped out near 18%. Regarding logistics, the broker points to a slowdown in demand and landlords’ incentives offering discounts of between -15% to -20%. Vacancy rates are forecast to peak at 3%-4%, with book value write-downs of -5% for logistics. Residential will continue to be challenged by high rates, the analyst notes, and affordability remains an issue. Ord Minnett’s top picks in the sector are Dexus, Scentre Group, Vicinity Centres, and Goodman Group, with a preference for Charter Hall Social, Growthpoint, and Arena in the smaller REIT cap space. HMC Capital is upgraded to Hold from Sell with a higher target price of $9.15 from $6.50.

HUB24 LIMITED ((HUB)) was upgraded to Buy from Hold by Ord Minnett. B/H/S: 3/4/0

Ord Minnett upgrades Hub24 to a Buy rating following a strong 2Q update, reflecting broad-based natural flows and a robust operating performance. Hub24 reported net flows of $5.5bn, meeting the broker’s expectations, and platform funds under administration (FUA) of $98.9bn as of 31 December, an 8% increase for the quarter.

Total FUA, including non-custody assets, reached $120.9bn, up 7%. Further growth is anticipated, with $0.9bn of Equity Trustees ((EQT)) FUA yet to transition and potential opportunities such as the Clearview Wealth Foundation’s ((CVW)) $1.3bn mandate in H2 FY25, explains the analyst. Ord Minnett anticipates strong new business growth and a favourable competitive environment. The broker makes no changes to earnings forecasts or valuation and retains a $73.00 target price.

LENDLEASE GROUP ((LLC)) was upgraded to Hold from Lighten by Ord Minnett. B/H/S: 1/4/0

Ord Minnett has reviewed the property sector earnings forecasts, considering expectations commercial property is at the bottom of the cycle, while residential remains challenged. Lendlease Group is upgraded to Hold from Lighten with a higher target price of $6.40 from $6.20.

MEGAPORT LIMITED ((MP1)) was upgraded to Buy from Hold by Ord Minnett. B/H/S: 4/2/0

Ord Minnett upgrades Megaport to Buy from Hold following a decline in the share price of over -40% in the last six months. The analyst believes the risk/reward is more attractive at current levels, with upside potential for higher subscriber numbers and services growth following the company’s price rises in FY24. There are no changes to the broker’s earnings forecasts. Buy rating maintained with a $8 target price.

NATIONAL AUSTRALIA BANK LIMITED ((NAB)) was upgraded to Neutral from Underperform by Macquarie. B/H/S: 1/1/3

Following a review of banking stocks, Macquarie has retained its underweight sector call due mainly to highly stretched valuations. Given the anaemic earnings growth outlook, the broker struggles to get bullish at current levels, even after incorporating more favourable trends.  The broker has incorporated short-term margin trends and a better-than-expected economic backdrop which has driven pre-provision upgrades of 3-5% in FY25 and 0-3% in FY26. The broker sees National Australia Bank as an attractive longer-term exposure to a more resilient small and medium enterprises banking sector that is less homogenous than retail banking and likely to deliver better returns. Given modest upside risk to FY25 earnings, and a relative valuation appeal to Commbank ((CBA)) and Westpac ((WBC)), Macquarie has tactically upgraded NAB to Neutral from an Underperform rating. The target price is also lifted to $36 from $32.5 based on an 11% sustainable return-on-tangible equity in the Gordon Growth valuation and a 17.3x multiple to FY25 earnings.

NATIONAL STORAGE REIT ((NSR)) was upgraded to Accumulate from Hold by Ord Minnett. B/H/S: 2/3/1

Ord Minnett has reviewed the property sector earnings forecasts, taking into account expectations commercial property is at the bottom of the cycle, while residential remains challenged. National Storage REIT is upgraded to Accumulate from Hold with a lower target price of $2.40 from $2.50.

NETWEALTH GROUP LIMITED ((NWL)) was upgraded to Neutral from Sell by Citi. B/H/S: 0/7/0

Citi upgrades Netwealth Group to Neutral from Sell post the 2Q25 trading update, with a lift in the target price to $30.70 from $28.90. The company announced a rise in FUA of 30% growth, which was above Citi’s estimate by 3%, from robust market moves and stronger inflows. Citi lifts EPS forecasts by 2.4% and 5% for FY25/FY26, respectively, including an expected lift in Netwealth’s growth in cost guidance of 19% for FY25. The group’s cash margin exceeded expectations with a 15bps increase over the quarter due to Netwealth reducing the rate offered to clients by -15bps to match the rate offered by Hub24 ((HUB)). Citi finds the change surprising, as the analyst anticipated management would employ the change when trading conditions were more challenging. Neutral. Target $30.70.

PRAEMIUM LIMITED ((PPS)) was upgraded to Accumulate from Hold by Ord Minnett. B/H/S: 1/0/0

Bell Potter upgrades EPS forecasts for Praemium by 2-6% following a strong 2Q update, and raises the target price to 90c from 63c, reflecting improved revenue momentum and a positive outlook. The rating is upgraded to Accumulate from Hold. Group net inflows of $371m significantly improved from $139m in the prior quarter, note the analysts. The SMA platform contributed $261m in net inflows, up 58.2%, while Powerwrap reversed its previous outflows with $78m in net inflows. Funds under administration (FUA) grew by 4% over the quarter to $30.2bn, marking a 31.7% increase year-on-year, supported by strong market conditions, explains Ord Minnett.

PEXA GROUP LIMITED ((PXA)) was upgraded to Add from Hold by Morgans. B/H/S: 3/0/0

Morgans marks-to-market earnings forecasts for insurance and diversified financials, considering market performance, the weaker AUD, and higher bond yields in Australia, the US, and Great Britain. The broker upgrades Pexa Group to Add from Hold with a $14.61 target price. There are no changes to Morgans’ earnings forecasts for the group.

VIRIDIS MINING AND MINERALS LIMITED ((VMM)) was upgraded to Buy from Hold by Ord Minnett. B/H/S: 1/0/0

Ord Minnett upgrades Viridis Mining and Minerals to Buy from Hold, retaining a $1 target price. The company updated the mineral resource estimate for Colossus to 93mt, a rise of 140%, giving the company 106mt of high-grade total rare earth oxides. The analyst upgrades the NAV on Colossus by 34c to $2.95 per share, noting the stock trades at a sizeable discount to Meteoric Resources ((MEI)) despite possessing a similar asset. Ord Minnett also highlights considerable hurdles for production, as demand for mixed rare earth carbonates remains “thin.” A strategic partner or a rebound in sentiment is needed to develop Colossus, the broker explains.

In the bad books: downgrades

CALIX LIMITED ((CXL)) was downgraded to Speculative Hold from Speculative Buy by Bell Potter. B/H/S: 1/1/0

Bell Potter lowers its target price for Calix to 80c from $1.55 and downgrades its rating to Speculative Hold from Speculative Buy after reviewing its investment thesis. The analysts attribute these changes to uncertainty surrounding US policies promoting decarbonisation and the company’s Heirloom-Leilac partnership. The Trump Administration has issued an Executive Order advising federal agencies to pause distributing funds under the Inflation Reduction Act and halt leasing and permitting of renewable energy projects. The process to withdraw the US from the Paris Agreement has also been restarted, and reports suggest Trump may propose rescinding the Inflation Reduction Act entirely, notes the broker.

 CARNARVON ENERGY LIMITED ((CVN)) was downgraded to Hold from Buy by Ord Minnett. B/H/S: 1/1/0

Ord Minnett downgrades Carnarvon Energy to Hold from Buy, with a lower target price of 14c from 21c due to uncertainty surrounding the delay in the start of the Dorado oil and gas project by Santos ((STO)). A final investment decision is not expected until 2028, the analyst states. Dorado is a key asset for Carnarvon, and the broker highlights questions around how much the company can achieve for its stake given the uncertainty regarding the development timeframe.

COMPUTERSHARE LIMITED ((CPU)) was downgraded to Neutral from Buy by Citi and to Hold from Add by Morgans. B/H/S: 2/4/0

Citi reluctantly joins consensus in downgrading Computershare to Neutral from Buy due to the rally in the share price. At current levels, upside risks are more uncertain, prompting a more cautious stance, the analyst explains. The broker views the current interest rate curve as potentially more positive than current forecasts for margin income, alongside expectations of higher corporate actions and debt issuance. Plan volumes also remain robust. Citi likes the two recent acquisitions, which, though small, could add new expertise to Issuer Services. The company’s balance sheet is also robust, the broker highlights, enabling further acquisitions. Target price is raised to $35 from $30. Neutral rating maintained. EPS forecasts are adjusted for forex moves and recent rate changes. Morgans marks-to-market earnings forecasts for insurance and diversified financials, considering market performance, the weaker AUD, and higher bond yields in Australia, the US, and Great Britain. The broker downgrades Computershare to Hold from Add due to the stock price re-rating. Fewer consensus US interest rate cuts in 2025, now expected at one versus two previously, and a strong 1Q25 trading update led the broker to believe there is FY25 earnings upside risk. No change to EPS estimates. Target price remains at $34.43.

EVOLUTION MINING LIMITED ((EVN)) was downgraded to Underperform from Neutral by Macquarie and to Neutral from Buy by Citi. B/H/S: 0/4/1

Macquarie believes Evolution Mining is on track to meet FY25 guidance for production and costs (AISC) following a review of second-quarter operational results. The analyst highlights the Cowal mine as a key 2Q contributor, with production increasing by 10% quarter-on-quarter. The broker raises its target price to $5.50 from $5.20 and downgrades the rating to Underperform from Neutral, reflecting the recent share price rise. Citi raises its target price for Evolution Mining to $5.80 from $5.50 and downgrades its rating to Neutral from Buy on valuation, after further analysis of yesterday’s 2Q operational report. Citi’s first impression of Evolution Mining’s 2Q25 report suggests a likely positive market response. Production and costs were better to in line with consensus, while higher commodity prices drove record cash flow. The analyst highlights cash flow as a standout, boosting cash on hand by 36% over the prior quarter to $520m. Citi notes growth in capex exceeded expectations due to the pull-forward of -$80m in Mungari capex to FY25 from FY26.

GOODMAN GROUP ((GMG)) was downgraded to Hold from Accumulate by Ord Minnett. B/H/S: 3/3/0

Ord Minnett has reviewed the property sector earnings forecasts, taking into account expectations commercial property is at the bottom of the cycle, while residential remains challenged. Goodman Group is downgraded to Hold from Accumulate with a lower target price of $39.50 from $41.

ILUKA RESOURCES LIMITED ((ILU)) Downgrade to Neutral from Buy by Citi. B/H/S: 2/3/0

In a second look at yesterday’s 4Q update by Iluka Resources, Citi lowers its target to $5.60 from $6.10 and downgrades to Neutral High Risk from Buy High Risk. Citi observes a disappointing December quarter report from Iluka Resources, with mineral sands revenue falling -17% below the analyst’s estimate and zircon, rutile, and synthetic rutile volumes down -12%. Pricing was mixed, with average zircon sand premium and standard prices below Iluka’s guidance, down -4.8% on the prior quarter. Citi notes zircon prices declined from 3Q, while rutile and synthetic rutile saw slight increases. Management plans to remove 130 roles, which Citi estimates will deliver a -$20m cost reduction for 2025. The company indicated proposed tariffs on Chinese imports to Europe and other regions in 1H25 may benefit Western pigment producers.

NANOSONICS LIMITED ((NAN)) was downgraded to Hold from Add by Morgans. B/H/S: 1/3/0

Morgans downgrades Nanosonics to Hold from Add with an unchanged target price of $3.75 due to the robust lift in the share price. Management offered an upbeat 1H25 trading update, with sales growth of 18% on the previous corresponding period, driven by growth from consumables and service revenue, the analyst notes. Capital unit sales remained “flat.” Morgans has not changed earnings estimates at this stage, with the analyst waiting for a firmer breakdown of details around the mix of capital sales between new and upgraded units. The broker’s current forecasts already sit at the upper end of guidance.

STOCKLAND ((SGP)) was downgraded to Hold from Accumulate by Ord Minnett. B/H/S: 2/3/0

Ord Minnett has reviewed the property sector earnings forecasts, taking into account expectations commercial property is at the bottom of the cycle, while residential remains challenged. Stockland is downgraded to Hold from Accumulate with a lower target price of $4.95 from $5.30.

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.