18 Share Tips – 16th June 2025

Welcome to this week’s edition of 18 Share Tips – our weekly selection of top ASX shares, chosen by leading analysts, that we think are worth considering.

This week Dylan Evans of Catapult Wealth , John Athanasiou of Red Leaf Securities and Angus Geddes of Fat Prophets share their ‘Buy’, ‘Hold’ and ‘Sell’ recommendations.

Please note these share tips are simply recommendations and are in no way intended as financial advice.  These share tips are general advice and don’t take into account any individual’s financial situation. Investors are advised to seek professional financial advice before investing.

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Dylan Evans, Catapult Wealth

BUY RECOMMENDATIONS

BUY – Goodman Group (GMG)

Goodman develops and manages a portfolio of quality industrial properties and data centres around the world. GMG benefits from growth in online retailing, changing supply chains, a tight property supply and quality industrial locations. In our view, the data centre business is GMG’s future growth engine offering additional upside. Data centres are capital intensive, but are valuable assets in the long term and offer investors a reliable way to access the growing digital economy and increasing data demands.

BUY – Steadfast Group (SDF)

Steadfast is the biggest general insurance broker in Australia. This position provides scale and the ability to negotiate competitive pricing arrangements with insurers. Insurance premiums have been increasing to Steadfast’s benefit without it carrying the underwriting risk of insurers. Steadfast has generated good momentum in organic growth, while executing acquisitions to further increase its scale in a relatively fragmented industry.

HOLD RECOMMENDATIONS

HOLD – Auckland International Airport (AIA)

AIA owns New Zealand’s biggest airport, which is a primary overseas travel gateway. This is a key piece of aviation infrastructure, something that’s becoming difficult to find on the ASX following several high profile acquisitions, such as Sydney Airport, in 2022. Overseas travel from AIA has been growing slowly, but still lags pandemic levels. So, it’s positioned for a recovery in travel. It retains conservative gearing levels and offers retail opportunities. AIA can expand and develop as it has plenty of land.

HOLD – Woolworths Group (WOW)

The supermarket giant endured a challenging first half in fiscal year 2025 in response to industrial action, a profit downgrade and government regulatory attention. Woolworths has embarked on more restructuring to re-gain market share lost to competitors. We expect regaining momentum will take Woolworths several years and involve price reductions and sacrificing margins. While WOW remains a resilient defensive option, generating sufficient profit growth during the next few years will be challenging, particularly against a backdrop of stretched consumer budgets.

SELL RECOMMENDATIONS

SELL – The a2 Milk Company (A2M)

China and Asia are key overseas markets for this infant formula company. A2M has been showing positive signs, with first half 2025 results generating revenue growth amid upgrades to forward guidance. The company delivered group revenue of $NZ893.8 million, up 10.1 per cent on the prior corresponding period. The company declared its first dividend of NZ8.5 cents. Despite the encouraging results, we see continuing challenges in China from potentially declining birth rates and changing regulations.

SELL – BWP Trust (BWP)

This real estate investment trust manages 82 properties, of which 68 are Bunnings Warehouse locations. The trust is solid across most metrics, with modest gearing of 21 per cent and a high occupancy level of 98 per cent. The trust is a reliable option for income, recently offering a dividend yield of 5 per cent. Our concern is BWP’s reliance on Wesfarmers, which contributes 85 per cent of rental income via Bunnings. Wesfarmers, the owner of Bunnings, also has an ownership stake in BWP. This relationship provides income security, but may also challenge BWP’s capability of maximising rental returns in the long term due to its concentration with Bunnings.

John Athanasiou, Red Leaf Securities

BUY RECOMMENDATIONS

BUY – Norwood Systems (NOR)

Norwood is a small market capitalisation company involved in artificial intelligence (AI) voice technology. The company recently secured a five year, $3 million supply contract to refresh the Optus voicemail system with Norwood’s CogVoice platform to enhance functionality. With early validation from a tier 1 telco, such as Optus, amid growing demand for AI-enhanced voice services, Norwood offers potential upside for speculative growth investors.

BUY – Transurban Group (TCL)

Transurban operates toll roads with inflation-linked revenues across key urban corridors in Australia and North America. As interest rate pressures ease and traffic volumes normalise, TCL is well placed to deliver stable, growing distributions. Average daily traffic across the group increased 1.8 per cent in the 2025 March quarter when compared to the prior corresponding period. The average was 2.5 million trips a day. TCL is a strong defensive play for income-focused investors seeking infrastructure-backed cash flow security.

HOLD RECOMMENDATIONS

HOLD – Commonwealth Bank of Australia (CBA)

CBA remains a market leader with strong profitability and dividend stability. The company posted an unaudited cash net profit after tax of $2.6 billion in the third quarter of fiscal year 2025, up 6 per cent on the prior corresponding period. Operating income was up 1 per cent driven by lending volume growth and higher trading income. However, potential superannuation tax changes, elevated valuations and slowing credit growth temper near-term upside. Investors may consider holding until more clarity on Federal Government policy emerges, or until the macroeconomic outlook improves for banks.

HOLD – Telstra Group (TLS)

Telstra’s 5G rollout and infrastructure upgrades support long term earnings. EBITDA of $4.2 billion in the first half of fiscal year 2025 was up 6 per cent on the prior corresponding period and net profit after tax of $1.1 billion grew 7.1 per cent. Telstra provides reliable dividends, making it suitable for income-focused portfolios. The fully franked interim dividend of 9.5 cents a share was up 5.6 per cent. The company recently re-affirmed underlying EBITDA guidance of between $8.5 billion and $8.7 billion for full year 2025. However, short-term competitive and regulatory pressures persist. While not a high growth story, its stability supports a hold recommendation as investors await catalysts for a re-rating. The shares have risen from $4.06 on March 17 to trade at $4.885 on June 12.

SELL RECOMMENDATIONS

SELL – Reece (REH)

Reece is a plumbing supplies company to commercial and residential customers via more than 900 branches in Australia, New Zealand and the United States. Net profit after tax of $181 million in the first half of fiscal year 2025 was down 19 per cent on the prior corresponding period. Sales revenue of $4.402 billion was down 3 per cent. Ongoing weakness in construction markets and rising cost pressures are weighing on earnings momentum. With limited upside under current conditions, investors may find better value in more reasonably priced names within the industrials sector. Reece continues to trade at a premium valuation, in our view.

SELL – James Hardie Industries PLC (JHX)

James Hardie is a global producer and marketer of high performance fibre cement. The company faces mounting macro headwinds, including softening US housing demand and elevated input costs. While the company remains a market leader, its valuation appears stretched. In our view, near-term earnings catalysts are limited, and margin stability could be put at risk in a more challenging building and construction environment.

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Angus Geddes, Fat Prophets

BUY RECOMMENDATIONS

BUY – Evolution Mining (EVN)

The gold miner has been capitalising on elevated gold prices amid displaying impressive cost discipline. It generated operating cash flow of $600 million in the 2025 March quarter, up 7 per cent on the prior quarter. Net mine cash flow rose 15 per cent. Key assets, including Ernest Henry and Cowal, are driving growth, while the Cowal open pit continuation project significantly extends mine life and value. EVN also offers exposure to copper. The outlook for gold and copper is positive. The company’s operations sit low on the cost curve, and, with minimal hedging, the outlook remains favourable.

BUY – WiseTech Global (WTC)

WiseTech develops and provides software solutions to the global logistics industry. The company recently announced the acquisition of e2open for $US2.1 billion. The acquisition of e2open accelerates WTC’s vision to become the operating system for global trade. The deal, funded entirely through debt, avoids dilution and is expected to be earnings accretive in its first year, with more than $US50 million in annual synergies anticipated in the second year. The e2open acquisition adds 500,000 connected enterprises and a largely complementary product suite, unlocking cross-selling opportunities and deepening network effects. While leverage increases short term risk, WiseTech’s strong cash flows, proven integration track record and reaffirmed guidance generates confidence in long term growth.

HOLD RECOMMENDATIONS

HOLD – Integral Diagnostics (IDX)

This radiology imaging firm delivered solid first half results in fiscal year 2025. The Capitol Health merger should deliver material synergies and improve urban margins. IDX is well positioned for long term growth through MRI (magnetic resonance imaging) deregulation and the national lung cancer screening program. However, in our view, persistent cost inflation and staffing challenges continue to weigh on profitability. We see the shares as range-bound in the near term.

HOLD – National Storage REIT (NSR)

This big self-storage provider delivered a solid result in the first half of fiscal year 2025. Profit after income tax of $87.9 million was up 11 per cent on the prior corresponding period. Underlying earnings of $77.9 million was up 2.5 per cent. Expansion efforts remained on track with 20 acquisitions amid seven new facilities adding 49,000 square metres to its portfolio. The GIC-backed national storage ventures fund generated $140 million in net sale proceeds to reduce debt and support capital flexibility. Group revenue per available metre grew 3.5 per cent, but was offset by flat momentum compared to the prior half. The pipeline remains robust and capital management is sound, but the share price now appears range-bound. With earnings guidance reaffirmed and long term fundamentals intact, we view NSR as fairly valued in the near term.

SELL RECOMMENDATIONS

SELL – Nufarm (NUF)

Nufarm is a global crop protection and seed technologies company. The recent first half result in fiscal year 2025 was poor, in our view, with leverage at 4.5 times due to lower rolling 12-month earnings and an increase in net debt. The seed technologies division is underperforming and facing market headwinds. Industry challenges persist, leading to no dividend and broker downgrades. Investor confidence is subdued and a recovery in the near term is uncertain. The shares have fallen from $4.02 on May 20 to trade at $2.235 on June 12.

SELL – Australian Agricultural Company (AAC) 

AAC is an integrated cattle and beef producer. The company posted a statutory net loss after tax of $1.1 million in fiscal year 2025, an improvement on the loss of $94.6 million in the prior corresponding period. Operating profit improved to $58.4 million. Increasing meat and cattle sales volumes assisted in offsetting market and price pressures. Wagyu meat sales price per kilogram was down 10 per cent. Cost of production per kilogram increased 5 per cent, reflecting inflation on inputs. Despite performance improvements, structural pressures still persist. The shares closed at $1.425 on June 14, 2024. The shares were trading at $1.375 on June 12, 2025. In our view, better growth opportunities exist elsewhere at this stage of the cycle.

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The above recommendations are general advice and don’t take into account any individual’s objectives, financial situation or needs. Investors are advised to seek their own professional advice before investing. Please note that TheBull.com.au simply publishes broker recommendations on this page. The publication of these recommendations does not in any way constitute a recommendation on the part of TheBull.com.au. You should seek professional advice before making any investment decisions.