18 Share Tips – 28th April 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 Jed Richards of Shaw and Partners 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 – CSL (CSL)

The share price of this biotechnology giant has been trending down since mid 2024. Threats from the Trump Administration to extend tariffs to imported pharmaceuticals would possibly have a negative impact on CSL, given it generates around half its revenue in the US. Despite these risks, we believe CSL represents good value. It remains a high quality company, delivering double digit earnings growth. It looks cheap compared to global peers. The impact of US tariffs is factored into the share price, so, in our view, there’s upside potential if they are withdrawn, or lower than anticipated.

BUY – Netwealth Group (NWL)

Netwealth offers superannuation and investment administration platforms, mostly through financial advisers. Netwealth is still a relatively smaller player in the market, sitting outside the top five platform providers. But it’s one of the fastest growing providers, significantly lifting funds under management by billions of dollars. These inflows are driven by market leading technology built on the back of consistent investment. Mandated superannuation guarantee increases ensure a growing market. Netwealth is ideally placed to grow its market share for years to come. Market volatility has offered a rare dip in the share price and presents an attractive buying opportunity.

HOLD RECOMMENDATIONS

HOLD – Coles Group (COL)

The supermarket giant has reported solid results despite challenging retail conditions. Group sales in the first half of fiscal year 2025 rose 3.7 per cent on the prior corresponding period. Underlying group earnings before interest and tax from continuing operations were up 8.9 per cent amid an increase in net margins. Coles offers a reliable fully franked dividend without the volatility associated with cyclical stocks.

HOLD – Lynas Rare Earths (LYC)

The share price has performed strongly since April 2, mostly driven by China restricting rare earth exports to the US. This was a response to the US imposing soaring tariffs on Chinese products. Lynas is a benefactor of these restrictions, as it’s one of the few companies outside China supplying these critical minerals. There is potential for significant earnings growth. But, in our view, most of it appears to be factored into the share price. The shares have risen from $6.85 on April 2 to trade at $8.32 on April 24.

SELL RECOMMENDATIONS

SELL – iShares S&P 500 ETF (IVV)

IVV is one of the largest exchange traded funds listed in Australia. IVV tracks the S&P 500 index in the US. President Trump’s tariff policies may hurt the US economy as uncertainly begins to negatively impact business and consumer confidence and investment. The US could experience an economic slowdown or recession. Despite recent falls, the US market is still at historically elevated levels and pricing in strong corporate growth. Should a slowdown or recession materialise, these stretched valuations leave the US market with plenty of room to fall. No reasonable diversified portfolio will be without US exposure. It may be time to lighten holdings in IVV.

SELL – Endeavour Group (EDV)

Endeavour operates liquor outlets, hotels and gaming facilities. We’ve been attracted to Endeavour as a well-managed business with solid brands. However, in our view, the broader liquor industry faces headwinds from higher prices during a cost-of-living crisis amid an increasing number of health-conscious consumers. EDV posted a modest fall in group sales in the first half of fiscal year 2025 and we believe this may be the beginning of a trend. The shares have fallen from $4.49 on January 27 to trade at $3.995 on April 24.

John Athanasiou, Red Leaf Securities

BUY RECOMMENDATIONS

BUY – Healius (HLS)

HLS is a diagnostic pathology and imaging company. The sale of Lumas Imaging to Affinity Equity Partners for $965 million will be completed on May 1, 2025. The company intends to pay a special fully franked dividend of about $300 million, or 41.3 cents a share. The company is focusing on strengthening its core pathology operations. Growth in test volumes, driven by an ageing population and increased demand for complex diagnostics, should support margin expansion — particularly as Healius invests in automation and artificial intelligence to reduce costs. The company is also well positioned to benefit from potential Medicare indexation reforms. While short term earnings have been under pressure, the combination of capital returns, structural demand and efficiency gains present an attractive medium term opportunity.

BUY – Webjet Group (WJL)

WJL was formed in September 2024 after Webjet Limited shareholders approved a demerger to enable two listed parent companies. WJL operates Australia and New Zealand’s online travel agent (OTA) business. WJL also operates GoSee, a global motor home and car rental e-commerce site and Trip Ninja, a travel technology business. This reset is aimed at unlocking value and improving agility. A strategic re-investment in brand and customer experience amid a potential tailwind from lower interest rates that encourages travel leaves WJL well placed for growth in the long term.

HOLD RECOMMENDATIONS

HOLD – Domino’s Pizza Enterprises (DMP)

The fast food giant remains a strong business, particularly the Australian franchise. The company is focusing on creating a simpler and more consistent company. Store optimisation benefits and a reset in Japan are underway. Earlier this year, DMP announced it was closing 205 loss-making stores, with 172 in Japan. The company is committed to improving profitability and positioning the business for long term sustainable growth, although this is likely to take time. Patient shareholders can consider holding for a recovery.

HOLD – 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. The challenging trading environment in the first half of fiscal year 2025 was reflected in its results. Sales revenue was down 3 per cent on the prior corresponding period and earnings before interest and tax fell by 17 per cent. Despite the challenges, the company continues to invest in the business. Acquiring product agency Shadowboxer enhances the group’s digital capabilities. The short term may be challenging, but we like the long term outlook.

SELL RECOMMENDATIONS

SELL – NextDC (NXT)

NXT operates a network of data centres. It’s relying on artificial intelligence to drive growth for data centres. But uncertainty surrounds the outlook for data centre demand after Microsoft recently abandoned major data centre expansion plans in the US and Europe. Returns on NXT capital investment are modest, in our view. NXT shares have fallen from $16.09 on January 22 to trade at $11.065 on April 24. Past capital raisings have diluted the stock. Investors should be wary of chasing the data centre theme in the absence of stronger results.

SELL – Mineral Resources (MIN)

MIN is a leading diversified resources company, with extensive operations in lithium, iron ore, energy and mining services across Western Australia. MIN’s outlook is challenged by falling iron ore and lithium prices. The company reported an underlying net loss after tax of $196 million from continuing operations in the first half of fiscal year 2025, down 200 per cent on the prior corresponding period. The company didn’t declare an interim dividend. The recent and sudden resignations of two non-executive directors have raised corporate governance concerns among investors. The share price has been smashed in the past 12 months. Also, high debt levels amid declining investor confidence skews the risk/reward to the downside, in our view.

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Jed Richards, Shaw and Partners

BUY RECOMMENDATIONS

BUY – Xero (XRO) 

Xero is a global accounting software provider. We rate it as a strong contender in the growth stock category. XRO delivered an impressive performance in its first half results in fiscal year 2025. Revenue of $NZ996 million was up 25 per cent on the prior corresponding period. Analysts expect growing revenue and earnings moving forward. The company enjoys a customer retention rate of 99 per cent, which highlights its loyal user base. Also, Xero’s subscriber growth continues to increase, with more than 4.2 million. Innovative features and strategic acquisitions further strengthen its position as a global leader in cloud accounting software.

BUY – ResMed Inc (RMD) 

ResMed is a global leader in healthcare technology. It makes medical devices to treat sleep disordered breathing, such as sleep apnoea. On April 24, ResMed posted an 8 per cent increase in revenue in the third quarter of fiscal year 2025. The gross margin improved 140 basis points to 59.3 per cent. Income from operations increased 14 per cent. ResMed’s innovative products and steady revenue growth make it a solid investment.

HOLD RECOMMENDATIONS

HOLD – HUB24 (HUB) 

HUB24 is a leading investment and superannuation platform provider in Australia. The company has a strong track record of performance. It recently reported record platform net inflows of $4.9 billion for the third quarter of fiscal year 2025, a 39 per cent increase compared to the previous corresponding period. Total funds under administration reached $124.1 billion, up 24 per cent. The total number of advisers using the platform increased by 14 per cent during the third quarter. HUB24 is well respected for its platform functionality and product offerings.

HOLD – South32 (S32) 

South32 is a globally diversified mining and metals company. It produces copper, aluminium, silver, lead, zinc and nickel. It has operations in Australia, southern Africa and South America. South32 has increased copper and aluminium production and its net cash position in fiscal year 2025. Market watchers are optimistic the company will deliver annual earnings growth. Despite a recent dip in the share price, South32 is trading at good value when compared to peers. The company offers a solid balance sheet.

SELL RECOMMENDATIONS

SELL – AGL Energy (AGL)

This energy giant has recently faced challenges, including global market volatility and shifts in energy policies. While the company is investing in renewable energy and battery storage, its share price has been under pressure. Analysts have mixed views about the outlook for the stock. We’re focusing on the risks associated with transitioning away from traditional energy sources. The company posted a 7 per cent fall in underlying net profit after tax in the first half of fiscal year 2025 when compared to the prior corresponding. The fully franked interim dividend was down 12 per cent. Considering the current financial fundamentals, investors may want to consider searching for better opportunities elsewhere.

SELL – Orica (ORI) 

Orica produces and supplies explosives to the global mining industry. We’re concerned about the outlook for the global economy. If the global economy weakens, it could potentially result in lower commodity prices. Weaker commodity prices may lead to mining companies reducing costs, which in turn, could impact Orica. Shares in Orica have fallen from $17.23 on April 2 to trade at $15.945 on April 24. I can’t identify sufficient catalysts that will result in any meaningful share price upside in the short term.

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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.