In Case You Missed It – BC Extra Upgrades & Downgrades – 22-09-23

Weekly Reports | Sep 22 2023

A summary of the highlights from Broker Call Extra updates throughout the week past.

Broker Rating Changes (Post Thursday Last Week)

Upgrade

ALS LIMITED ((ALQ)) Upgrade to Buy from Neutral by Jarden.B/H/S: 0/0/0

Jarden believes a turning point is approaching for ALS Ltd. The acquisition of a 49% stake in Nuvisan delivered headwinds for the life sciences division as the company struggled to replace lost contract revenue amid cost inflation imposts on EBITDA margins.

Options, both call and put, in the company's favour are exerciseable from January 1, 2024 and the broker estimates exercising the call option on the remaining 51% equity stake in Nuvisan could boost underlying EBIT forecast for life sciences by 10% FY25 and drive further accretion for the group.

Following movements in the share price, and in updating global peer valuation multiples, Jarden lifts the rating to Buy from Neutral, believing the current share price provides good risk/reward for investors. Target rises to $13.40 from $11.50.

MONADELPHOUS GROUP LIMITED ((MND)) Upgrade to Overweight from Neutral by Jarden.B/H/S: 0/0/0

Jarden is becoming more bullish on Monadelphous Group amid the announcement of $260m in new contracts gained over the past two weeks.

The engineering and construction ramp-up is beginning to translate to the order book and the broker is now more confident in both the amount of construction contracts in the pipeline and the company's ability to win tenders.

Rating is upgraded to Overweight from Neutral and the target lifted to $14.45 from $12.40. Monadelphous has won $610m in new contracts over the first three months of the first half.

Downgrade

MUSGRAVE MINERALS LIMITED ((MGV)) Downgrade to Hold from Speculative Buy by Canaccord Genuity.B/H/S: 0/0/0

Ramelius Resources ((RMS)) is now approaching the compulsory acquisition threshold of 90%, now holding 88.6% of Musgrave Minerals. Canaccord Genuity envisages little risk to compulsory acquisition being achieved over coming days.

Therefore any further competing bids are ruled out and the target is lowered to $0.36 from $0.50, being the current implied price based on the acquisition terms. Rating is downgraded to Hold from Speculative Buy.


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