Home / Share Market News / Broker Notes / 3 ASX 200 shares just scored significant broker upgrades. Here's how
The brokers' bullish assessments for these ASX 200 shares include share price gains of up to 13%.
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Bernd Struben
Bernd Struben earned his BA in economics from the University of Michigan in 1991, with post-graduate studies in environmental economics at the University of Connecticut. Over the years he’s written about and analysed the tourism industry in the Caribbean; Europe’s commercial real estate markets; and, since moving to Australia in 2010, global and Aussie share markets.
Bernd studies geopolitical and macroeconomic trends, alongside sector and company specific data, to gauge what he believes could be tomorrow's best investments.
In his free time, you might find Bernd at the beach with his family or working on his next science fiction novel.
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| More on: PNVREHWDSASX 200
Three S&P/ASX 200 Index(ASX: XJO) shares just scored significant broker upgrades.
The analysts' bullish assessments for these companies, including share price gains of up to 13%, follow on the release of yesterday's earnings results.
So, without further ado, here are the three stocks with some sizeable potential gains ahead.
(Broker data courtesy of The Australian.)
Why these ASX 200 shares could surge in 2024
The first ASX 200 share earning a broker upgrade is medical device developer Polynovo Ltd (ASX: PNV).
For its half-year results (1H FY 2024) Polynovo reported a 54.9% year on year increase in sales to $42.2 million. That represents a new half-year record for the healthcare stock.
Meanwhile, revenue soared 65.6% from 1H FY 2023 to $48.8 million. And net profit after tax (NPAT)came in at $2.7 million, up from a loss of $3.8 million.
The Polynovo share price closed down 1.7% yesterday. But investor sentiment has turned sharply bullish today, with Polynovo shares up 9.3% in afternoon trade at $2.17.
Wilsons sees further upside potential even after that big boost. The broker raised Polynovo to an overweight rating with a $2.44 price target. That represents a potential 12% gain from current levels.
Which brings us to the second ASX 200 share receiving a broker upgrade, plumbing parts company Reece Ltd (ASX: REH).
Reece also reported its half-year results yesterday.
Among the highlights was an 8% year on year increase in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), which came in at $526 million. The company's adjusted net profit after tax (NPAT) was up 6% to $224 million.
And passive income investors were treated to a fully franked interim dividend of 8 cents per share, in line with last year.
The Reece share price gained a whopping 18.3% yesterday. With some likely profit-taking going on shares are down 4.0% today, trading for $27.37 apiece.
Citi believes that it's undervalued. The broker raised Reece to a neutral rating with a $28.90 price target, 5.6% above current levels.
Australian oil and gas giant tipped to outperform
Rounding out the list of ASX 200 shares receiving broker upgrades following their earnings results is oil and gas giant Woodside Energy Group Ltd (ASX: WDS).
Woodside reported its full 2023 results yesterday.
With the prices it receives for oil and gas both coming down sharply from 2022, so did Woodside's revenues. Operating revenue of US$13.99 billion declined 17% year on year.
Underlying NPAT of US$3.32 billion was down 37% from the prior year. This saw the final, fully franked dividend cut by 58% to 60 US cents per share.
Still, those are some strong profit and revenue figures, with Woodside also reporting free cash flow of US$560 million.And the ASX energy giant still trades on a fully franked yield of 7.2%.
Woodside shares gained 0.9% yesterday and are down 0.5% today, trading for $30.15 apiece.
And Morgan Stanley sees some sizeable upside potential for the ASX 200 share from here.
The broker upgraded Woodside shares to an overweight rating with a $34 price target. That's almost 13% above the current share price.
