18 Share Tips – 3rd March 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 Tony Paterno of Ord Minnett, Mark Gardner of MPC Markets and Tony Locantro of Alto Capital 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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Tony Paterno, Ord Minnett

BUY RECOMMENDATIONS

BUY – Origin Energy (ORG)

Recently released earnings met market expectations, and the company declared an interim dividend comfortably above consensus estimates. Total group revenue of $8.771 billion for the six months ending December 31, 2024, was up 10 per cent on the prior corresponding period and statutory profit of $1.017 billion grew 2 per cent. The dividend of 30 cents a share was up 2.5 cents. Earnings guidance for its key energy markets business in fiscal year 2025 was reiterated, while the company declared its dividend payout level could be supported. We view ORG as a solid, well managed operation and see value in the stock.

BUY – CSL (CSL)

This biotechnology giant recently posted mixed results across its key business units in the first half of fiscal year 2025. Management flagged that gross margins for its plasma business Behring are expected to reach about 57 per cent by fiscal year 2027/2028. We believe this is crucial considering Behring currently accounts for about 67 per cent of group revenue and 63 per cent of earnings. Recent price/earnings valuations imply an attractive entry level, particularly as CSL has traditionally traded at a steep premium to the S&P/ASX200.

HOLD RECOMMENDATIONS

HOLD – Amcor PLC (AMC)

The packaging giant posted December quarter and first half earnings in fiscal year 2025 that matched market expectations. Full year 2025 guidance for earnings per share and free cash flow were also reaffirmed. Combined with management commentary highlighting its confidence in the second half of 2025, we view the result as a solid outcome for a company that offers defensive exposure amid broader economic uncertainty.

HOLD – AGL Energy (AGL)

First half profit in fiscal year 2025 was ahead of market expectations and the interim dividend met consensus forecasts. Underlying EBITDA of $1.068 billion was down 1 per cent on the prior corresponding period. The company declared a fully franked interim dividend of 23 cents a share. The company has narrowed its guidance range for fiscal year 2025. It has forecast underlying EBITDA of between $1.935 billion and $2.135 billion. Previous guidance for underlying EBITDA was between $1.870 billion and $2.170 billion.

SELL RECOMMENDATIONS

SELL – Evolution Mining (EVN)

The gold miner exceeded our expectations and consensus with a bumper first half earnings result in fiscal year 2025. Record underlying profit after tax of $385 million rose 144 per cent on the prior corresponding period. Earnings per share of 18.4 cents increased by 251 per cent. Gold and copper production were up 22 per cent and 36 per cent respectively. The strong first half performance amid an improving commodity environment has been reflected in a stronger share price. The shares have risen from $3.42 on July 1, 2024, to trade at $6.32 on February 27, 2025. In our view, the valuation is stretched, with the company trading at a significant premium to peers. Investors may want to consider taking a profit.

SELL – Nick Scali (NCK) 

The furniture retailer posted first half earnings and an interim dividend ahead of market expectations in fiscal year 2025. Australia and New Zealand underlying net profit after tax of $36 million was above profit guidance of between $30 million and $33 million provided at the annual general meeting in October 2024. The company’s UK division posted an underlying net loss after tax of $2.8 million. The company declared a fully franked dividend of 30 cents a share. We note a weaker Australasian order book in the December quarter and into January, leading us to forecast a fall in 2025 second half revenue of about 6 per cent.

Mark Gardner, MPC Markets

BUY RECOMMENDATIONS

BUY – Steadfast Group (SDF) 

Steadfast has demonstrated consistent growth and resilience, delivering 11 consecutive years of underlying profit growth. The company’s robust business model, combining insurance broking and underwriting agencies, provides multiple avenues for expansion and risk mitigation. The group’s proprietary technology platforms offer a significant competitive advantage in efficiency and market reach. The company’s strong market position, diversified revenue streams and strategic international expansion, particularly into the US market, further enhance its growth prospects.

BUY – Bellevue Gold (BGL)   

The Bellevue gold project is one of Australia’s highest grade mines. Production started in October 2023 and commercial production started in May 2024. The company is poised for significant growth. Fiscal year 2025 gold production guidance is between 150,000 ounces and 165,000 ounces. Forecast gold production in the second half of fiscal year 2025 is about 90,000 ounces. The company aims to increase production to more than 250,000 ounces a year within five years. The company announced a maiden net profit after tax of $75 million in fiscal year 2024. In my view, the stock is undervalued.

HOLD RECOMMENDATIONS

HOLD – CSL (CSL)

The biotechnology giant generated revenue of $US8.470 billion in the first half of fiscal year 2025, up 5 per cent at constant currency on the prior corresponding period. Net profit after tax of $US2.043 billion at constant currency was up 7 per cent. Key product segments demonstrated strong growth, with immunoglobulin product sales up 15 per cent. Albumin sales increased 9 per cent and haemophilia product sales increased 11 per cent. The company’s gross margin improved by 170 basis points, reflecting operational efficiency.

HOLD – Woolworths Group (WOW) 

Group net profit after tax of $739 million in the first half of fiscal year 2025 was down 20.6 per cent on the prior corresponding period. The interim dividend of 39 cents was cut by 17 per cent. Encouragingly, group sales of $35.9 billion grew by 3.7 per cent. The company announced Australian food total sales growth of 3.3 per cent in the first seven weeks of the second half of fiscal year 2025. It attributed the growth to a more stable trading environment following the recovery from industrial action in late 2024. The shares appear undervalued, in my view.

SELL RECOMMENDATIONS

SELL – WiseTech Global (WTC)

WiseTech develops and provides software solutions to the global logistics industry. The company delivered total revenue of $US381 million in the first half of fiscal year 2025, up 17 per cent on the prior corresponding period. Statutory net profit after tax of $US106.4 million was up 38 per cent. However, the company recently experienced boardroom upheaval, with four independent, non-executive directors standing aside over intractable differences and differing views around the ongoing role of WiseTech founder Richard White. The shares plunged following the announcement of resignations on February 24, 2025. White stood down as WiseTech chief executive on October 24, 2024, but transitioned to a consulting role. On February 26, 2025, the company announced that White had been appointed to the board as executive chairman. The shares have fallen from $121.70 on February 19 to trade at $94.80 on February 27. Until a clear succession plan is in place, the company is an unappealing investment, in my view.

SELL – JB Hi-Fi (JBH) 

The consumer electronics giant posted total sales of $5.67 billion in the first half of fiscal year 2025, up 9.8 per cent on the prior corresponding period. Net profit after tax of $285.4 million was up 8 per cent. In my view, the company’s latest financial results don’t justify the lofty share price.    Although the shares have retreated from above $100, the stock has risen from $56.29 on May 10, 2024, to trade at $92.06 on February 27. Australian dollar weakness may push up prices for home appliances and electronic goods, making it tougher for JB Hi-Fi to sustain sales.

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Tony Locantro, Alto Capital

BUY RECOMMENDATIONS

BUY – Great Southern Mining (GSN)

Reverse circulation drilling is underway at the company’s 100 per cent owned Duketon gold project in Western Australia. The project is in an environment where investor interest in small market capitalisation gold explorers is increasing. In Queensland, GSN has a joint venture with Gold Fields, where two larger scale IP (induced polarisation) targets have been identified at Leichhardt Creek and Mt Dillon. These represent exciting targets for GSN, where drilling is planned to start early in the June quarter following the wet season. In the meantime, the company announced that on-going geophysical surveys and on-ground mapping could potentially generate further targets.

BUY – Saturn Metals (STN)

An additional 190,000 ounces of gold has been added to the Apollo Hill gold project. It takes the total gold resource beyond 2 million ounces. Further extensional and in-fill drilling results support the company’s accelerating development strategy and will contribute to a mineral resource upgrade in the second half of fiscal year 2025. A pre-feasibility study is also scheduled to be completed in 2025. In our view, STN offers an outstanding growth profile in the Western Australian gold sector via emerging production and exploration.

HOLD RECOMMENDATIONS

HOLD – Mayfield Group Holdings (MYG)

Mayfield provides electrical and telecommunication solutions across Australia’s power infrastructure. The company was recently awarded a $20 million contract to supply and install 26 prefabricated protection buildings at the central west orana renewable energy zone. A further $15 million in other new contracts took work-in-hand to $95 million as of January 2025. The company declared a fully franked special dividend of 5.3 cents on top of a 1 cent interim dividend at its half year results in fiscal year 2025. This highlights the company’s strong financial position and growth prospects.

HOLD – Far East Gold (FEG)

Strategic investor Xingye has invested a further $4.783 million in FEG, taking its stake to 19.99 per cent, with all three tranches priced at 20 cents a share. This funding will assist FEG’s exploration efforts at the Idenburg gold project in Indonesia, where an initial 540,000 ounces at 4.1 grams a tonne of gold was announced. FEG has an impressive portfolio of high risk, but high reward exploration projects in Indonesia. The Mount Clark West project in Queensland is prospective for copper. We suggest holding or accumulating as exploration activities increase in calendar year 2025.

SELL RECOMMENDATIONS

SELL – Computershare (CPU)

This financial administration and share registry services provider posted strong financial results for the first half of fiscal year 2025. The company delivered a profit after tax from continuing operations of $286.5 million, an increase of 24.9 per cent on the prior corresponding period. Core businesses delivered revenue growth, an improvement in earnings and margin expansion. The company declared an interim dividend of 45 cents a share, up 12.5 per cent. The strong performance provides an opportunity to lighten holdings. The shares have risen from $26.47 on July 1, 2024, to trade at $41.29 on February 27.

SELL – Commonwealth Bank of Australia (CBA)

The bank delivered a strong half year result in fiscal year 2025. Statutory net profit after tax of $5.142 billion was up 6 per cent on the prior corresponding period. The fully franked interim dividend of $2.25 a share was up 5 per cent. The share price performance of CBA relative to the banking and financial sector has been strong, with the stock trading at a significant premium to its peers. The shares have risen from $117.36 on March 1, 2024, to trade at $155.81 on February 27, 2025. Investors may want to consider taking some profits in what we consider a high share price.

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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.