Australian Broker Moves 28 July


A selection of ratings upgrades and downgrades, target price changes, and commentary for ASX stocks from major research houses for 28 July.



In the big brokers' spotlights today, Healius Limited (HLS) after its Q4 update, Perpetual Limited (PPT) after its Barrow Hanley acquisition, and Rio Tinto Limited (RIO) ahead of its H2 earnings release tomorrow.

In other moves, UBS upgraded price targets for seven local gold miners on the back of surging gold prices. UBS expects these companies to see better cash flows, and therefore to potentially also pay bigger dividends.

 
Alacer Gold Corp. AQG UBS raises Alacer Gold Corp. (AQG) price target from $10.30 to $11.  Says updating valuation for higher gold price forecasts.
Bubs Australia Limited BUB Citi downgrades Bubs Australia Limited (BUB) rating from buy to neutral. Lowers price target from $1.10 to $1. Is concerned about 5% drop in Q4 gross revenue, cuts FY20 EBITDA by 8%, FY21 by 7%, and FY22 by 10%. But notes, co still has promising future.
CSL Limited CSL Goldman Sachs lowers CSL Limited (CSL) price target from $336 to $326. Retains buy rating. Cites challenges around plasma collection, competition as reasons for recent underperformance. Notes however, bearish case unlikely to manifest and therefore risk-reward remains favourable.
Emeco Holdings Limited EHL Jefferies lowers Emeco Holdings Limited (EHL) price target from $1.20 to $1.10. Retains hold rating. Blames 4Q20 gross sales numbers for cuts to FY20 EBITDA estimates by 8%, FY21 by 7%, and FY22 by 10%.
Evolution Mining Limited EVN UBS raises Evolution Mining Limited (EVN) price target from $4.60 to $5.  Says updating valuation for higher gold price forecasts. Notes EVN (along with NST) is least preferred gold play
Healius Limited HLS Citi downgrades Healius Limited (HLS) rating from buy to neutral. Lowers price target from $3.55 to $3.35. Is concerned about uncertainty around forecasts, margins.
Healius Limited HLS Credit Suisse raises Healius Limited (HLS) price target from $3.25 to $3.35. Retains outperform rating. Cites continued strength in covid-19 testing rates.
Healius Limited HLS Macquarie raises Healius Limited (HLS) price target from $3.40 to $3.55. Retains outperform rating. Describes market update as better than expected. Sees growth opportunities going forward.
Insurance Australia Group Limited IAG Goldman Sachs lowers Insurance Australia Group Limited (IAG) price target from $6.22 to $5.48. Retains neutral rating. Blames softer underlying trends, margin pressures. Lowers EPS estimates for FY20 by 33%, FY21 by 12%, and FY22 by 14%.
Karoon Energy Ltd KAR Macquarie raises Karoon Energy Ltd (KAR) price target from $0.90 to $1.25. Retains outperform rating. Expects cash will be diverted away from a special dividend to investment to boost production.
Newcrest Mining Limited NCM UBS raises Newcrest Mining Limited (NCM) price target from $38.40 to $40.60.  Says updating valuation for higher gold price forecasts. Notes NCM is most preferred gold play.
Northern Star Resources Ltd NST UBS raises Northern Star Resources Ltd (NST) price target from $14.20 to $15.50.  Says updating valuation for higher gold price forecasts. Notes NST (along with EVN) is least preferred gold play.
Nufarm Limited NUF UBS upgrades Nufarm Limited (NUF) rating from neutral to buy. Retains $5.19 price target. Cites likely improvement in European margins.
Oceanagold Corporation OGC UBS raises Oceanagold Corporation (OGC) price target from $4.30 to $4.70.  Says updating valuation for higher gold price forecasts.
Perpetual Limited PPT Citi lowers Perpetual Limited (PPT) price target from $33.60 to $32. Retains neutral rating. Downgrades EPS estimates for FY20 by -10%. Upgrades FY21 by +1%, and FY22 by +8%. Warns that medium term execution of Barrow Hanley acquisition may be difficult.
Perpetual Limited PPT Credit Suisse raises Perpetual Limited (PPT) price target from $32 to $36.50. Retains neutral rating.  
Perpetual Limited PPT Macquarie raises Perpetual Limited (PPT) price target from $33 to $33.50. Retains neutral rating. Notes earnings guidance is below expectations. Prefers other plays in sector.
Perpetual Limited PPT Morgan Stanley retains overweight rating on Perpetual Limited (PPT). Retains $45 price target. Broker likes Barrow Hanley acquisition, notes, little overlap with PPT's existing products. 
Perpetual Limited PPT Morgans raises Perpetual Limited (PPT) price target from $34.22 to $37.90. Retains hold rating. Broker likes Barrow Hanley acquisition, notes could be transformational, but comes with some risks.
Ramsay Health Care Limited RHC Morgan Stanley raises Ramsay Health Care Limited (RHC) price target from $55 to $56. Retains underweight rating. Cites industry headwinds and uncertainty surrounding VIC covid-19 situation for rating.
Rio Tinto Limited RIO Macquarie raises Rio Tinto Limited (RIO) price target from $110 to $111. Retains outperform rating. Cites improvement in iron ore prices.
Rio Tinto Limited RIO UBS retains neutral rating on Rio Tinto Limited (RIO). Retains $102 price target. Expects copper to have negative impact on H2 earnings.
Regis Resources Limited RRL UBS raises Regis Resources Limited (RRL) price target from $6 to $6.50.  Says updating valuation for higher gold price forecasts.
Saracen Mineral Holdings Limited SAR UBS raises Saracen Mineral Holdings Limited (SAR) price target from $6.30 to $6.90.  Says updating valuation for higher gold price forecasts.
Western Areas Limited WSA Goldman Sachs lowers Western Areas Limited (WSA) price target from $2.50 to $2.30. Retains neutral rating. Blames lower than expected grades, reduced reserves. 



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