Weekly Ratings, Targets, Forecast Changes – 20-01-23

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Weekly update on stockbroker recommendation, target price, and earnings forecast changes.

By Mark Woodruff

Guide:

The FNArena database tabulates the views of seven major Australian and international stock brokers: Citi, Credit Suisse, Macquarie, Morgan Stanley, Morgans, Ord Minnett and UBS.

For the purpose of broker rating correlation, Outperform and Overweight ratings are grouped as Buy, Neutral is grouped with Hold and Underperform and Underweight are grouped as Sell to provide a Buy/Hold/Sell (B/H/S) ratio.

Ratings, consensus target price and forecast earnings tables are published at the bottom of this report.

Summary

Period: Monday January 16 to Friday January 20, 2023
Total Upgrades: 8
Total Downgrades: 31
Net Ratings Breakdown: Buy 53.77%; Hold 37.15%; Sell 9.08%

Following the holiday break, the level of stockbroker research has now bounced back strongly and for the week ending Friday January 20 there were eight upgrades and thirty-one downgrades to ASX-listed companies in the FNArena database.

More than half of those downgrades were made by Ord Minnett, which began the year whitelabeling research from Morningstar instead of that by former partner/owner JP Morgan.

This change has created several distortions for the tables below. Every time a Morningstar analyst produces first-time research for a particular stock in 2023, one-off adjustments to forecasts and price targets occur from the old (JP Morgan) research. In addition, Morningstar has implemented a number of analyst changes, and fresh ideas have led to an (outsized) number of ratings changes.

ASX sector reviews by brokers also tend to inflate the number of forecast and target price changes.

Last week Morgan Stanley reviewed large regional Retail malls and concluded they offer safety, security and growth over the next 12-18 months, which led to higher ratings for GPT Group and Vicinity Centres (both upgraded to Equal-weight from Underweight) and a new Overweight rating for Scentre Group, up from Equal-weight.

Over at Macquarie, gold stock target prices were raised by 6-20% due to the emergence of material earnings upgrade potential to spot gold prices. Northern Star Resources is the broker’s preferred large cap gold name due to relatively lower-risk production growth and balance sheet strength compared to both Newcrest Mining and Evolution Mining.

On the other hand, Credit Suisse lowered its rating for Northern Star during the week to Neutral from Outperform and forecasts the year-on-year gold price will remain largely flat. This broker prefers exposures to Newcrest and St Barbara.

A lift in target to $14 from $12 by Macquarie was sufficient to elevate Northern Star to the head of the positive price target change table. Other target increases had a distinctive Resource-sector flavour, with Origin Energy (Utilities sector), Evolution Mining, Newcrest and Sandfire Resources all receiving a greater than 5% boost by brokers on average.

The top ten target decreases ranged from circa -2% to the around -9% for Baby Bunting, after preliminary December-half results fell well shy of consensus. Sales were weaker and operating expenses rose, leaving Neutral-rated Citi cautious around increased competition and concerned over a sharp fall in the number of 12–16-week ultrasounds.

Given the above-mentioned disruption caused by newly sourced research by Ord Minnett, only selective stocks will be referred to in the negative change earnings forecast table below.

Macquarie lowered its earnings forecasts for 29Metals after reviewing the weaker-than-expected 2023 guidance issued in late December, caused by a reduction in milling rates at the Capricorn copper operations in QLD in order to manage tailings storage capacity.

After five brokers submitted new research on Northern Star Resources following its second quarter production report, the average earnings forecast in the FNArena database slipped by -17%.

Morgans also lowered its earnings estimates for Link Administration by -8% in FY23 and -12% in FY24 after removing Pexa Group earnings from forecasts (post the in specie distribution) and reduced profit assumptions.

The research changes at Ord Minnett were misleadingly responsible for Alumina Ltd heading up the table for the largest percentage increase in forecast earnings in the FNArena database last week. Citi actually lowered its rating for Alumina Ltd to Sell from Neutral as a result of AWAC JV partner Alcoa's latest market update, in which the company lowered its guidance for 2023. 

Both Citi and Morgan Stanley now suggest a second half dividend is unlikely. Despite this outlook, Morgan Stanley retained an Overweight rating as 2022 finished with the alumina market in balance, and lower 2023 global production should result in a tighter market and rising prices.

In the Retail sector, brokers raised earnings estimates for both JB Hi-Fi and Super Retail Group last week.

JB Hi-Fi’s preliminary first half earnings and profit exceeded consensus forecasts by 14.3% and 15.2%, respectively, though Underperform-rated Macquarie remained cautious on the coming year as cost-of-living pressures increase.

Of the seven brokers in the FNArena database, two have a Buy or equivalent rating for JB Hi-Fi, three are Hold and two have Sell ratings.

Convictions are slightly stronger for Super Retail Group with four Buys, one Neutral and a Sell, after a December-half trading update sharply outpaced consensus forecasts. 

Outperform-rated Credit Suisse suspects capital management may soon be on the cards, including a special dividend which would take the dividend yield to roughly 10%. 

Less positively, Ord Minnett (Sell) is concerned by looming competition from Amazon, while Macquarie (Neutral) remains somewhat cautious given the group is facing tough comparables over the remainder of the fiscal year.

Total Buy recommendations comprise 53.77% of the total, versus 37.15% on Neutral/Hold, while Sell ratings account for the remaining 9.08%.

Upgrade

GPT GROUP ((GPT)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 3/2/0

Morgan Stanley believes large regional Retail malls will offer safety, security and growth over the next 12-18 months.

The analysts feel investors will come to appreciate the relative strength of Retail REITs compared to other mainstream sectors such as Office. It’s also thought landlords are well placed to cope with potential consumer headwinds from higher interest rates.

The broker points out market rent has declined around -10% in the past three years, while retail sales across the key specialty categories (eg cafe, clothing) have increased circa 8% on a three year compound annual growth rate (CAGR) basis to October 2022.

Morgan Stanley upgrades its rating for GPT Group to Equal-weight from Underweight. Office exposure makes up 35-40% of GPT’s portfolio, which mitigates against a higher rating. The target rises to $4.84 from $4.50. Industry view: In-Line.

HEALIUS LIMITED ((HLS)) Upgrade to Hold from Lighten by Ord Minnett .B/H/S: 2/3/1

Ord Minnett upgrades its rating for Healius to Hold from Lighten on valuation.

By FY27, the broker expects the earnings (EBIT) margin will expand to 13% from 8% prior to the pandemic and approves of the company strategy of selling medical centres and day hospitals to achieve a simpler structure.

The last target price entry in the FNArena database was $2.70 in mid-December last year which now increases to $3.55. Ord Minnett has switched to whitelabeling research by Morningstar (previously: JP Morgan).

See also HLS downgrade.

INSURANCE AUSTRALIA GROUP LIMITED ((IAG)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 4/2/1

Morgan Stanley upgrades Insurance Australia Group to Equal-weight from Underweight on stronger earnings forecasts as premium price increases are expected to outpace rising input costs.

The broker points out the company's multiples are undemanding, La Nina has likely ended and longer-term action on climate resilience has commenced.

Suncorp Group is preferred by Morgan Stanley over QBE Insurance and Insurance Australia Group.

An updated target price is awaited (last $4.20). Industry View: In-Line. 

ORIGIN ENERGY LIMITED ((ORG)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 3/1/0

Morgan Stanley has used a deep dive into Australia's utilities sector to upgrade Origin Energy to Overweight from Equal-weight. The broker's price target has moved to $8.88 from $6.35.

The broker's analysis suggests energy transition opportunities are firming while distributed energy resources are opening up faster than before. Add higher conviction in the company's access to capital and that upgrade now hinges on Origin management monetising the multiple opportunities.

Morgan Stanley sees multiple question marks and headwinds for the industry as a whole and thus retains its Cautious view on sector-level.

The broker's bear case sees valuation dropping to $5.54 while a bull case scenario would lift it to $9.39.

SCENTRE GROUP ((SCG)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 3/2/1

Morgan Stanley believes large regional Retail malls will offer safety, security and growth over the next 12-18 months.

The analysts feel investors will come to appreciate the relative strength of Retail REITs compared to other mainstream sectors such as Office. It’s also thought landlords are well placed to cope with potential consumer headwinds from higher interest rates.

The broker points out market rent has declined around -10% in the past three years, while retail sales across the key specialty categories (eg cafe, clothing) have increased circa 8% on a three year compound annual growth rate (CAGR) basis to October 2022.

Morgan Stanley upgrades its rating for Scentre Group to Overweight from Equal-weight.

Capitalisation rate analysis shows the group is now trading at similar cap rates to 2012-14, the last time bond yields were at current levels, suggesting to the broker relatively less downside.

Scentre Group is Morgan Stanley's most preferred Retail REIT, given asset values have already been marked down by around -9% since early 2000 and around 60-70% of income is linked to CPI. The target rises to $3.55 from $3.00. Industry View: In-line.

SUNCORP GROUP LIMITED ((SUN)) Upgrade to Overweight from Equal-weight by Morgan Stanley .B/H/S: 7/0/0

Morgan Stanley upgrades Suncorp Group to Overweight from Equal-weight on stronger earnings forecasts as premium price increases are expected to outpace rising input costs.

The broker points out the company's multiples are undemanding, La Nina has likely ended and longer-term action on climate resilience has commenced.

Suncorp Group is preferred by Morgan Stanley over QBE Insurance and Insurance Australia Group.

An updated target price is awaited (last $11.30). Industry View: In-Line. 

UNIBAIL-RODAMCO-WESTFIELD SE ((URW)) Upgrade to Accumulate from Lighten by Ord Minnett .B/H/S: 1/0/0

Ord Minnett upgrades Unibail-Rodamco-Westfield to Accumulate from Lighten as the broker has switched to whitelabeling Morningstar research instead of JP Morgan's.

The broker says the price at which the company can sell assets, and the pace of the economic recovery will prove critical to the company's valuation.

Target price rises to $6.80 from $4.70 (JP Morgan).

VICINITY CENTRES ((VCX)) Upgrade to Equal-weight from Underweight by Morgan Stanley .B/H/S: 0/6/0

Morgan Stanley believes large regional Retail malls will offer safety, security and growth over the next 12-18 months.

The analysts feel investors will come to appreciate the relative strength of Retail REITs compared to other mainstream sectors such as Office. It’s also thought landlords are well placed to cope with potential consumer headwinds from higher interest rates.

The broker points out market rent has declined around -10% in the past three years, while retail sales across the key specialty categories (eg cafe, clothing) have increased circa 8% on a three year compound annual growth rate (CAGR) basis to October 2022.

Morgan Stanley upgrades its rating for Vicinity Centres to Equal-weight from Underweight. The target rises to $2.26 from $1.90. Industry view: In Line.

Downgrade

AMPOL LIMITED ((ALD)) Downgrade to Neutral from Outperform by Credit Suisse .B/H/S: 3/2/0

While suggesting near-term risks are potentially to the upside, Credit Suisse downgrades its rating for Ampol to Neutral from Outperform on valuation. The near-term outlook is considered supportive for refining and fuel retail margins

The broker assesses the 4Q update was solid, though refining margins (the relatively volatile component of earnings) caused a miss versus the consensus forecast.

Management pointed to improvements in Convenience Retail and Fuels & Infrastructure.

The target falls to $29.72 from $30.49.

AMCOR PLC ((AMC)) Downgrade to Hold from Accumulate by Ord Minnett .B/H/S: 0/6/0

Ord Minnett has cut its rating for Amcor to Hold from Accumulate on valuation.

Ord Minnett has switched to whitelabeling research by Morningstar. The target falls to $17 from the last entry of $19.30 (by JP Morgan) in the FNArena database in early-November last year.

ALUMINA LIMITED ((AWC)) Downgrade to Sell from Neutral by Citi and Downgrade to Sell from Hold by Ord Minnett .B/H/S: 2/0/3

Post AWAC JV partner Alcoa's latest market update, in which the company lowered its guidance for 2023, Citi analysts have downgraded Alumina Ltd to Sell from Neutral.

Target price loses -10c to $1.50.

The most important statement is probably the following: On Citi's revised 2023 alumina price forecast of US$345/t (up from US$338/t) Alumina Ltd will be near break-even and thus unlikely to pay a dividend.

A stronger Aussie dollar is also a negative. The good news is Citi is projecting a return of dividends in 2024, currently estimated at US9.7c.

Ord Minnett downgrades Alumina Ltd's rating to Sell from Hold after the share price breached valuation support.

Target price falls to $1.20 compared with $1.50 – the last entry in FNArena's data base in November.

Ord Minnett has switched to whitelabeling research by Morningstar.

BABY BUNTING GROUP LIMITED ((BBN)) Downgrade to Hold from Add by Morgans .B/H/S: 2/3/0

Baby Bunting's December-quarter revenue disappointed Morgans, but the broker spies a recovery in gross margins which it expects will continue throughout FY23.

Increasing competition continues to hamper the company's growth and the broker revises its expansion expectations, saying a second earnings disappointment cannot be discounted, even though the improvement in gross margins should enable the company to meet FY23 guidance.

Rating is downgraded to Hold from Add. Target price falls to $2.80 from $3.60.

CHALLENGER LIMITED ((CGF)) Downgrade to Sell from Neutral by Citi and Downgrade to Hold from Add by Morgans .B/H/S: 0/6/1

Challenger's outlook might still be boosted by higher interest rates, Citi's update highlights there are equally a number of negatives on the horizon.

The combination of pros and cons still leaves the broker thinking the negatives will outweigh the positives. Downgrade to Sell from Neutral.

Among the negatives cited are higher costs, pressure on property values, and negative returns for alternatives and equities in the broker's marking to market.

The fact the share price has been on a run recently doesn't exactly help either. Target has gained 10c to $7.

Morgans revises its estimates and ratings for 13 companies heading into 2023.

Challenger's rating is downgraded to Hold from Add, following recent share price strength. Target price rises to $7.93 from $7.71.

CEDAR WOODS PROPERTIES LIMITED ((CWP)) Downgrade to Hold from Add by Morgans .B/H/S: 0/1/0

Morgans expects lower demand across key greenfield land markets for residential property developer Cedar Woods Properties as the market eases back from a strong 2021/22 and rising interest rates weigh.

The broker lowers its rating to Hold from Add though points out the company should benefit in the medium term from increased migration and the ongoing lack of affordable housing.

The analyst suggests buying shares when either they approach $4.00 (currently $4.46) or when Morgans identifies lower risks to earnings forecasts. 

The target falls to $4.80 from $4.98.

DEXUS ((DXS)) Downgrade to Underweight from Overweight by Morgan Stanley .B/H/S: 2/1/1

Morgan Stanley downgrades Dexus to Underweight from Overweight as fundamentals deteriorate.

The broker observes office vacancies have hit a 20-year high and given the glut of developments, may take years to recover. Add that to a forecast economic slowdown in 2023 and question marks over asset valuations, and the picture is difficult to salvage.

While the broker admires management's enterprising spirit and its push to diversify, Morgan Stanley doubts this shift will be swift enough to combat the mounting negatives in 2023.

Target price falls to $7.90 from $10.55.

EVOLUTION MINING LIMITED ((EVN)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 3/2/2

Credit Suisse reviews metals sectors and spies an increase in nickel, alumina and gold prices but expects copper prices will struggle. IGO is the broker's preferred pick across all sectors.

The broker's copper forecasts are -15% shy of consensus, the broker expecting that additional supply will land in a slowing economy, and oversupplied market.

Evolution Mining is downgraded to Underperform from Neutral to reflect the failure of the copper, zinc and gold prices to rise sufficiently to justify the broker's valuation.

HEALTHCO HEALTHCARE & WELLNESS REIT ((HCW)) Downgrade to Neutral from Outperform by Macquarie .B/H/S: 1/2/0

Macquarie reassesses the outlook for HealthCo Healthcare & Wellness REIT.

The broker forecasts FY23 guidance is likely to be achieved with higher funding costs offset by the earnings addition from recent acquisitions.

However, reported liquidity concerns around GenesisCare which accounts for 12% of portfolio income could remain a negative for the group.

Although the stock is trading at a -12% discount to the reported $2.01 NTA, Macquarie expects a fall in asset values and higher corporate costs will offset the benefits of any development revaluations.

The rating is downgraded to Neutral from Outperform and the target is adjusted to $1.76 from $1.66 due a change in cap rate assumptions.

HEALIUS LIMITED ((HLS)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 2/3/1

Credit Suisse reviews the Australian pathology sector and cuts covid-19 PCR testing forecasts from January 2023, to reflect regulation requiring a more expensive GP referrals for the test.

The broker expects covid PCR tests to fall from a peak of 60,000 a day to just 5,500, pending infection waves.

The broker estimates tests represent 2% of Healius's income but will result in a rough halving of earnings (EBIT) margins and observes the company's "stretched" balance sheet.

EPS forecasts fall -16% in FY23 and -22% in FY24 (the broker advises it sits -22% below consensus). 

Rating downgraded to Underperform from Neutral.  Target price eases to $3.10 from $3.20.

See also HLS upgrade.

HARVEY NORMAN HOLDINGS LIMITED ((HVN)) Downgrade to Lighten from Buy by Ord Minnett .B/H/S: 2/1/2

Taking into account new competition from online pure players, Ord Minnett lowers its rating for Harvey Norman to Lighten from Buy. 

The broker points out domestic competitors in the online space (where Harvey Norman is under-indexed) now have to compete against international prices. Amazon Australia is expected to become a formidable opponent in the medium term.

Ord Minnett has switched to whitelabeling research by Morningstar. The target falls to $3.90 from the last entry of $4.80 (by JP Morgan) in the FNArena database in early-December last year.

ILUKA RESOURCES LIMITED ((ILU)) Downgrade to Hold from Buy by Ord Minnett .B/H/S: 2/3/1

Ord Minnett updates its commodity price assumptions across the Resources sector following a general rise in prices over the final quarter of 2022.

Over this period, the impetus from further China stimulus and government support for the property sector outweighed the impact of rising global interest rates, explains the broker.

Despite higher mineral sands prices (which offset a stronger currency), a change of analyst results in a cut to the rating of Iluka Resources to Hold from Buy.

Ord Minnett has switched to whitelabeling research by Morningstar. The target remains at $11.00 which is also the last target (by JP Morgan) in the FNArena database set in late-October last year.

JB HI-FI LIMITED ((JBH)) Downgrade to Lighten from Hold by Ord Minnett .B/H/S: 2/3/1

Ord Minnett raises its FY23 EPS estimate for JB Hi-Fi by 10% (longer-term forecasts unchanged) following stronger-than-expected 1H earnings, supported by sales growth and increased operating margins.

Ord Minnett has switched to whitelabeling research by Morningstar. Due to recent share price strength (and a change of analyst) the broker's rating is downgraded to Lighten from Hold. During 2023 consumer spending is expected to progressively weaken.

At the end of October 2022, the last target in the FNArena database was $46 (set by JP Morgan), which has now fallen to $35.50.

JAMES HARDIE INDUSTRIES PLC ((JHX)) Downgrade to Accumulate from Buy by Ord Minnett .B/H/S: 5/1/0

Ord Minnett downgrades James Hardie Industries to Accumulate from Buy, expecting the US housing market will weaken in response to rising interest rates.

While cautious in the near to mid term, the broker admires the company's long-term prospects and considers James Hardie Industries to be undervalued compared with the broker's fair value estimate.

Target price is $40, which compares with the November entry in the FNArena data base of $42.80. In between Ord Minnett has switched to Morningstar research instead of JP Morgan's.

LOVISA HOLDINGS LIMITED ((LOV)) Downgrade to Equal-weight from Overweight by Morgan Stanley .B/H/S: 3/2/0

Morgan Stanley lowers its rating for Lovisa Holdings to Equal-weight from Overweight on concerns over slowing demand as reopening tailwinds ease and macroeconomic headwinds increase (particularly in Europe).

The broker also cites potential for a higher promotional spend in a downturn, along with a weaker Australian dollar, wage inflation and higher costs for roll-outs in new regions. It's also felt launches in new countries may miss forecasts.

The target falls to $25.00 from $27.25.

MIRVAC GROUP ((MGR)) Downgrade to Neutral from Outperform by Macquarie .B/H/S: 4/2/0

Macquarie reassesses the outlook for Mirvac Group with uncertainty regarding the outlook and recovery in the residential markets increasing the risks to FY24 earnings.

The broker notes their FY24 forecasts are -6% below consensus due to an expected $40m reduction in commercial development profits. although residential pre-sales could provide a buffer.

Based on the in-house macro economic forecast that interest rates will not be cut in 2023, Macquarie envisages a PER re-rating will not transpire in the near term, as multiple expansion for housing related companies typically occurs 6-8 months prior to any rate reduction.

The next catalyst for Mirvac Group is the 1H23 results due on February 9.

The rating is downgraded to Neutral from Outperform.

A $2.30 target is retained.

NANOSONICS LIMITED ((NAN)) Downgrade to Hold from Add by Morgans and Downgrade to Lighten from Hold by Ord Minnett .B/H/S: 0/1/1

Following a strong 1H trading update by Nanosonics and revised FY23 guidance, Morgans raises its near-term forecasts though lowers its rating to Hold from Add after recent share price strength.

Management increased FY23 guidance for total revenue growth to 36-41% from 20-25%, yet the analyst remains at the bottom end of this range, awaiting more detail. The split of the upgrade between currency, direct sales mix and consumables is considered unclear.

Regardless, the broker feels the update will alleviate concerns regarding the transition to direct sales away from the pass-through relationship with General Electric.

The target rises to $5.19 from $4.91.

Ord Minnett cuts its rating for Nanosonics to Lighten from Hold on valuation, despite evidence of improvement within stronger-than-expected pre-announced 1H results.

The broker expects the rate of growth in installed base units will slow over the next five years to average 6.8% from the five-year historical average of 16.2% as a result of an increasingly mature North American market.

In addition, the analyst expects increasing competition once the Trophon device patent expires in 2025.

Ord Minnett has switched to whitelabeling research by Morningstar. The target remains at $4.00, unchanged from the price set by JP Morgan in the FNArena database in late-November last year.

NEWCREST MINING LIMITED ((NCM)) Downgrade to Neutral from Outperform by Macquarie .B/H/S: 4/3/0

Largely driven by plant maintenance, Macquarie expects Newcrest Mining can deliver a quarter-on-quarter production improvement in the fourth quarter, but highlights Newcrest Mining's targeted production growth is reliant on the development of large scale underground operations, which it considers to have some risk. 

The broker further notes the company's share price lagged peers, falling by -16% over the last year. 

The rating is downgraded to Neutral from Outperform and the target price decreases to $23.00 from $25.00.

NORTHERN STAR RESOURCES LIMITED ((NST)) Downgrade to Neutral from Outperform by Credit Suisse .B/H/S: 2/4/0

Credit Suisse reviews metals sectors and spies an increase in nickel, alumina and gold prices but expects copper prices will struggle. IGO is the broker's preferred pick across all sectors.

The broker believes the gold price will remain largely flat year on year but should find near term support from US-dollar pressure and a likely economic slowdown, particularly if stagflation ensues.

Northern Star Resources is downgraded to Neutral from Outperform on valuation grounds.

The broker's preferred gold picks are Newcrest Mining and St Barbara Mines.

PREMIER INVESTMENTS LIMITED ((PMV)) Downgrade to Sell from Hold by Ord Minnett .B/H/S: 3/2/1

Ord Minnett lowers its rating for Premier Investments to Sell from Hold on valuation.

The last target price entry in the FNArena database was $25.60 in early-December last year, which now falls to $19. Ord Minnett has switched to whitelabeling research by Morningstar (was JP Morgan previously).

REDBUBBLE LIMITED ((RBL)) Downgrade to Hold from Add by Morgans .B/H/S: 0/3/0

Following Redbubble’s 2Q trading update and revised FY23 guidance, Morgans lowers its FY23-25 earnings (EBITDA) forecasts by -10-25%. The target slumps to 70c from $1.00 and the rating is downgraded to Hold from Add.

While 1H total marketplace revenue (MPR) was in line with consensus, the company altered the terms of its guidance. Now MPR is expected to be in line with FY22, compared to the prior “revenue growth is expected in FY23”.

The analyst notes increasing competitive intensity and a more value conscious customer, which necessitated additional promotional spend. Management will now be undertaking some cost-out initiatives.

REA GROUP LIMITED ((REA)) Downgrade to Lighten from Accumulate by Ord Minnett .B/H/S: 2/3/1

Ord Minnett downgrades REA Group to Lighten from Acccumulate after the share price broke valuation support. Ord Minnett has switched to Morningstar research instead of JP Morgan's.

The broker does say it considers the competitive environment to be stable and expects the company will be able to continue raising prices "at multiples of the rate of inflation".

FY23 EPS forecasts are cut. Target price is $100, which compares with the last entry in the FNArena database in November of $132 (JP Morgan).

SOUTH32 LIMITED ((S32)) Downgrade to Hold from Buy by Ord Minnett .B/H/S: 4/3/0

Ord Minnett updates its commodity price assumptions across the Resources sector following a general rise in prices over the final quarter of 2022.

Over this period, the impetus from further China stimulus and government support for the property sector outweighed the impact of rising global interest rates, explains the broker.

Despite stronger aluminium, alumina and manganese prices, a change of analyst results in a cut to the broker's rating for South32 to Hold from Buy.

Ord Minnett has switched to whitelabeling research by Morningstar. The target rises to $4.40 from the last entry of $4.10 (by JP Morgan) in the FNArena database in mid-December last year.

SEEK LIMITED ((SEK)) Downgrade to Hold from Buy by Ord Minnett .B/H/S: 4/1/1

Ord Minnett downgrades Seek to Hold from Buy, expecting monetary tightening and inflation will likely take their toll on the jobs market.

But the broker still finds the company an attractive proposition and notes for now, ABS data reveal a tight labour market, albeit declining from its May peak. 

Ord Minnett now forecasts an earnings (EBITDA) compound annual growth rate of 11% through to fiscal 2027. This compares with 25% from fiscal 2019 to 2022.

$22.80 target price retained. Ord Minnett has switched to whitelabeling Morningstar research instead of JP Morgan's.

SANDFIRE RESOURCES LIMITED ((SFR)) Downgrade to Underperform from Neutral by Credit Suisse .B/H/S: 3/2/2

Credit Suisse reviews metals sectors and spies an increase in nickel, alumina and gold prices but expects copper prices will struggle. IGO is the broker's preferred pick across all sectors.

The broker's copper forecasts are -15% shy of consensus, the broker expecting that additional supply will land in a slowing economy, and oversupplied market.

Sandfire Resources is downgraded to Underperform from Neutral to reflect the failure of the copper price to support the broker's company valuation.

SUPER RETAIL GROUP LIMITED ((SUL)) Downgrade to Lighten from Hold by Ord Minnett .B/H/S: 4/1/0

Super Retail Group's preliminary December-half result sharply outpaced consensus and Ord Minnett's forecasts, thanks to strong holiday and Black Friday sales and improved margins.

Ord Minnett increases its full-year earnings estimate by 39% and increases the target price 6% to $9.50. The broker is now whitelabeling Morningstar research instead of JP Morgan's.

But given the share price is trading above the broker's valuation, the broker downgrades to Lighten from Hold, and cites competition from Amazon as a serious concern.

The broker estimates earnings (EBT) margins should average 9% over the next 10 years, compared with 10% in fiscal 2022.

TRANSURBAN GROUP LIMITED ((TCL)) Downgrade to Lighten from Buy by Ord Minnett .B/H/S: 3/3/0

Ord Minnett downgrades its rating for Transurban Group to Lighten from Buy on valuation.

While there has been a strong recovery in traffic volumes post covid-19 lockdowns, distributions fell -20% in FY20 and are unlikely to fully recovery until this financial year, suggests the analyst.

Ord Minnett has switched to whitelabeling research by Morningstar. The target falls to $12.00 from the last entry of $15.00 (by JP Morgan) in the FNArena database in mid-October last year.

VIVA ENERGY GROUP LIMITED ((VEA)) Downgrade to Accumulate from Buy by Ord Minnett .B/H/S: 4/2/0

While the 4Q 2022 sales volume and refiner margin for Viva Energy exceeded Ord Minnett's expectations, no longer-term implications are drawn.

All segments of Viva's business performed strongly, yet a new analyst decides to downgrade the company's rating to Accumulate from Buy, without elaboration.

At the same time the broker's FY23 EPS forecasts is increased by 23% after a recent material increase in Singapore refiner margin futures.

Ord Minnett has switched to whitelabeling research by Morningstar. The target falls to $3.20 from the last entry of $3.30 (by JP Morgan) in the FNArena database in late-October last year.

Total Recommendations	Recommendation Changes
Broker Recommendation Breakup

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