18 Share Tips – 24th February 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 Elio D’Amato of Daylight Financial Group, Jabin Hallihan of Family Financial Solutions and Stuart Bromley of Medallion Financial Group 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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Elio D’Amato, Daylight Financial Group

BUY RECOMMENDATIONS

BUY – Evolution Mining (EVN)

The gold miner smashed expectations in its first half fiscal year 2025 result. Revenue of more than $2 billion was up 52 per cent on the prior corresponding period. Record underlying profit after tax of $385 million rose 144 per cent and earnings per share of 18.4 cents increased by 251 per cent. Group cash flow surged by 420 per cent and the fully franked dividend jumped 250 per cent to 7 cents a share. Gold production increased by 22 per cent, copper by 36 per cent and gearing fell to 23 per cent. The company reaffirmed full year guidance and expects operating cash flow to exceed $2 billion. If gold prices stay high and costs remain under control, the dividend should also keep climbing.

BUY – Charter Hall Social Infrastructure REIT (CQE)

CQE invests in social infrastructure properties within Australia. Following its first half result in fiscal year 2025 and recent share price bounce, CQE is trading at a hefty discount to net tangible assets. It has a conservative balance sheet, with no debt maturing until July 2027. Occupancy remains at 100 per cent. The company divested $84 million in childcare properties at an 8.6 per cent premium to book value, while reducing childcare exposure from 77 per cent to 74 per cent. Investing $47 million in a healthcare facility provides more portfolio diversity. Market rent reviews on 60 properties in fiscal year 2025 provides potential for rental growth. Management increased distribution guidance, implying a 5.5 per cent forecast yield. A buy-back of up to $25 million adds further upside to sentiment.

HOLD RECOMMENDATIONS

HOLD – CAR Group (CAR)

This automotive classifieds advertising giant delivered solid numbers in its 2025 half year result, but expectations were higher. Reported revenue of $579 million grew 9 per cent on the prior corresponding period, while net profit after tax of $123 million was up 5 per cent. The strongest performance came from Brazil, with revenue up 30 per cent, while Australia and North America grew 9 per cent. However, the result missed broker consensus by around 2 per cent. Analysts remain positive on demand for used cars and product innovation, but currency headwinds and capital expenditure risks keep CAR Group a hold for now.

HOLD – JB Hi-Fi (JBH)

This consumer electronics giant posted strong results in the first half of fiscal year 2025. Total sales of $5.67 billion were up 9.8 per cent on the prior corresponding period. Net profit after tax of $285.4 million grew 8 per cent and beat expectations. Sales at JB Hi-Fi New Zealand led the company’s growth, with an increase of 20 per cent. Sales at JB Hi-Fi Australia and The Good Guys chain grew 7.2 per cent and 9.2 per cent respectively. The balance sheet remains strong, with net cash of $555.1 million. However, management flagged an uncertain retail environment and increasing competition as issues to watch. Analysts are positive, but the stock is trading near price targets.

SELL RECOMMENDATIONS

SELL – CSL (CSL)

The biotechnology giant disappointed the market with its first half result in fiscal year 2025. Revenue at the company’s vaccine division Seqirus was down 9 per cent due to low immunisation rates, particularly in the US. The plasma collection division CSL Behring remains the key profit driver. The company is expected to meet full year net profit after tax and amortisation of $3.2 billion to $3.3 billion at constant currency. But with limited near-term catalysts amid concerns about the outlook for Seqirus, some investors may see better opportunities elsewhere, particularly as the share price has done nothing for years.

SELL – Downer EDI (DOW)

Downer provides integrated services that maintains infrastructure across Australia and New Zealand. Statutory net profit after tax of $75.5 million in the first half of fiscal year 2025 was up 4.7 per cent on the prior corresponding period, but missed expectations. Statutory revenue of $5.221 billion was down 6.5 per cent. On December 12, 2024, Downer announced it would vigorously defend civil legal proceedings brought by the Australian Competition and Consumer Commission (ACCC) against its subsidiary Spotless Facility Services. The ACCC allegations also involve rival contractor Ventia Australia and four senior executives from both companies. The ACCC has alleged price fixing relating to estate maintenance and operation services for the Department of Defence on three occasions between April 2019 and August 2022.

Jabin Hallihan, Family Financial Solutions

BUY RECOMMENDATIONS

BUY – Domino’s Pizza Enterprises (DMP)

The fast food giant has a significant presence in Australia, Europe and Japan. The company is closing 205 unprofitable stores, mostly in Japan, to improve profitability. Group underlying net profit before tax is expected to range within guidance of between $84 million and $86 million in the first half of fiscal year 2025. In our view, the shares are significantly undervalued and present an opportunity to buy DMP at a discount.

BUY – CSL (CSL)

CSL is a global biotechnology company. It specialises in developing and making life saving medicines to treat serious diseases. The company’s share price recently hit a 52-week low, making it an attractive entry point, in our view. Despite mixed half year results in fiscal year 2025, the company lifted net profit after tax by 7 per cent at constant currency. A strong performance from CSL Behring amid a dividend increase in Australian currency of 16 per cent on the prior corresponding period highlight its potential. The company is positioned to deliver annualised double digit earnings growth in the medium term.

HOLD RECOMMENDATIONS

HOLD – AGL Energy (AGL)

The company’s earnings in the first half of fiscal year 2025 exceeded our expectations due to a strong performance in generating electricity. Underlying EBITDA of $1.068 billion was down 1 per cent on the prior corresponding period. The company’s growing battery portfolio posted impressive earnings. The company declared an interim, fully franked dividend of 23 cents a share. The company is forecasting underlying EBITDA of between $1.935 billion and $2.135 billion for full year 2025. The share price is trading at a discount following its first half results.

HOLD – Ansell (ANN)

Ansell makes personal protection equipment for healthcare and industrial workplaces. The company posted a strong first half result in fiscal year 2025. Group earnings before interest and tax of $US127.4 million grew by 20.9 per cent on the prior corresponding period in response to strong organic sales growth and improved manufacturing efficiencies. The company has increased adjusted earnings per share guidance to range between $US1.18 to $US1.28.

SELL RECOMMENDATIONS

SELL – Evolution Mining (EVN)

Evolution Mining is a leading gold mining company with operations in Australia and Canada. Benefiting from elevated gold prices, Evolution generated record underlying EBITDA of $1.014 billion in the first half of fiscal year 2025, up 77 per cent on the prior corresponding period. Increased gold and copper sales volumes offset higher labour costs. Despite this strong performance, the share price has doubled in the past 12 months to February 20, 2025, and is now trading at a significant premium, in our view.

SELL – Computershare (CPU)

Computershare is a global leader in transfer agency and share registry services. It’s also involved in employee equity plans, mortgage servicing and other diversified financial and governance services. The company delivered a strong half year result in fiscal year 2025. The company posted a profit after tax from continuing operations of $286.5 million, an increase of 24.9 per cent on the prior corresponding period. The company also upgraded full year guidance. The stock soared on the result to the point we now believe it’s overvalued.

CSL is recommended as a buy, a hold and a sell this week, as market experts take different views about the company’s outlook. EVN is also recommended as a buy and a sell this week.

Don’t Buy Just Yet

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Stuart Bromley, Medallion Financial Group

BUY RECOMMENDATIONS

BUY – Mount Hope Mining (MHM)

MHM is embarking on an exploration program in the resource-rich and mining friendly Cobar Basin, a region in New South Wales acknowledged for its copper-gold and zinc-lead-silver resources. With an experienced team, backing from industry heavyweights and positive results delivered by neighbouring explorers and producers, we believe MHM is one of the brightest prospects in the small mining exploration space. After its initial public offering, MHM is well funded to cover extensive drilling exploration at its five target sites in the year ahead. The company listed on the ASX on December 20, 2024.

BUY – IperionX (IPX)

The company’s hydrogen-based titanium manufacturing process is poised to transform the titanium industry. Uniquely, IPX can use 100 per cent scrap as feedstock to produce new titanium. Also, IPX owns a huge North American mineral resource of titanium, zircon and rare earth critical minerals. The company was recently awarded a contract of up to $US47.1 million by the US Department of Defence to secure US titanium supply chains. The shares have risen from $2.18 on July 1, 2024, to trade at $4.52 on February 20, 2025.

HOLD RECOMMENDATIONS

HOLD – GQG Partners (GQG)

This fund manager’s shares pulled back in November 2024, primarily due to GQG’s investment exposure to Adani Group companies, where several Adani executives are at the centre of bribery allegations in the US. While funds under management did initially fall, we believe the share price sell-off was overdone. Net fund inflows of $US1.7 billion in January 2025 is a sign that investors are looking past the negativity surrounding Adani and continuing to pile cash into this high quality global fund manager. Net operating income increased by 50.4 per cent in fiscal year 2024.

HOLD – CSL (CSL)

The share price of this global healthcare powerhouse was recently punished after posting what investors considered was an underwhelming interim result in fiscal year 2025. But we’re encouraged by CSL’s longer term prospects. The plasma business Behring performed well and is positioned for growth after rolling out 220 new collection centres. The vaccines business in the first half was weak, but we expect a stronger second half as Northern Hemisphere revenues flow to the business.

SELL RECOMMENDATIONS

SELL – AMP (AMP)

While management has worked hard to turn the share price around in the past 12 months, AMP’s recent full year 2024 report revealed statutory net profit after tax of $150 million had fallen 43.4 per cent on the prior corresponding period. Total revenue of $1.252 billion was down 1.1 per cent. Also, management reduced the company’s final dividend from 2 cents last year to 1 cent this year. This may lead to yield hungry investors looking elsewhere. Shares in this diversified financial services company were punished following the result.

SELL – Insurance Australia Group (IAG)

Shares in this insurance giant tumbled from $8.92 on February 12 to close at $7.80 the following day when it released its half year result for fiscal year 2025. This was despite the company lifting revenue from ordinary activities by 4 per cent and net profit after tax by 91.2 per cent. Perhaps, investors were unimpressed with gross written premium growth guidance, which is expected to be at the lower end of its range for the full year. While insurance companies typically benefit from a rate hiking cycle, the opposite applies when interest rates are cut. IAG shares were trading at $7.80 on February 20.

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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.