Our ‘Best Calls to Action’ are designed to guide you through the current reporting season landscape by highlighting stocks with compelling buying prospects. It also provides insights into those that may not be viable for growth at this time. These selections are based on rigorous analysis of market trends, financial health, and growth potential, ensuring you have access to high-value investment opportunities.
Happy to buy today
Suncorp (ASX:SUN) - Looking to the future as a pure-play General Insurer
SUN's FY24 cash NPAT (A$1,372m) was ~-5% below consensus (A$1,425m), mainly due to a softer General Insurance result than expected. FY25 guidance points to solid earnings momentum continuing into this year, and we see SUN's unveiled FY25-FY27 business strategy as uncomplicated, and focused on driving the insurance business harder (which should be well received).
We maintain our ADD rating.
Trim/Funding Source
Westpac Banking Corp (ASX:WBC) - Q3 NIM improvement
The Q3 trading update indicated WBC is tracking ahead of previous expectations, with NIM higher and costs and impairment charges lower than prior forecasts. Mid-single digit EPS upgrades for FY25-26F. 12 month target price lifts 8% to $26.11 due DCF valuation upgrades.
We maintain our HOLD rating.
IRESS (ASX:IRE) - Stability and flexibility returned to the core
IRE reported 1H24 adjusted EBITDA of A$67m, up 52% on pcp (top-end of recent guidance); and up ~8% HOH (2% HOH revenue growth on stable costs). FY24 Adjusted EBITDA guidance was provided at A$126-132m, post asset sales. Whilst the previous 'exit run-rate' guidance is no longer being provided, we expect the 2H24 drivers should see the upper-end of guidance achievable.
We adjust to a HOLD rating.
Reece (ASX:REH) - Tough housing conditions persist
REH's FY24 result was slightly weaker than our expectations but largely in line with Bloomberg consensus. Key positives: Group EBITDA margin rose 30bp to 11.1% due to good cost control despite softer housing conditions in ANZ in 2H24; ROCE increased 20bp to 15.5%; Balance sheet remains strong with ND/EBITDA falling to 0.6x vs 0.9x in FY23. Key negatives: ANZ earnings were below our forecasts as conditions continued to soften; Management expects the near term to remain challenging in both regions.
We maintain our REDUCE rating.
Morgans clients receive access to detailed market analysis and insights, provided by our award-winning research team. Begin your journey with Morgans today to view the exclusive coverage.
.jpg)
