Why these 3 ASX 200 shares just earned some big broker upgrades

Three S&P/ASX 200 Index (ASX: XJO) shares have just been upgraded by top brokers following this week’s earnings results.

According to these brokers, the three ASX 200 shares in question could enjoy gains of 15% to 21% in the year ahead. And that’s not including the dividends some of the companies pay.

Without further ado, here are the three stocks in question.

(Broker upgrade data, courtesy of The Australian.)

ASX 200 shares tipped for significant 2024 gains

The first company getting a broker upgrade today is online furniture and homewares retailer Temple & Webster Group Ltd (ASX: TPW).

The ASX 200 share closed up 9.8% yesterday after reporting some strong half-year results.

Highlights included all-time high half-year revenue of $254 million, up 23% from the prior corresponding period. And earnings before interest, taxes, depreciation and amortisation (EBITDA) increased 3% year on year to $7.5 million.

The company also boasts a strong balance sheet, with a closing cash balance of $114 million and no debt as at 31 December.

Temple & Webster shares are currently trading for $11.01 apiece, up a whopping 204% in 12 months.

But Citi’s analysts see more growth to come.

The broker raised Temple & Webster to a ‘buy’ rating with a $13 price target. That represents a potential upside of more than 18% from current levels.

Which brings us to the second ASX 200 share getting a broker upgrade, building materials supplier James Hardie Industries PLC (ASX: JHX).

The James Hardie share price closed down a painful 8.5% yesterday after the company released its third-quarter update.

Expectations were clearly highs, as investors hit the sell button despite the company reporting a 14% year on year increase in quarterly global net sales of US$978 million. And adjusted EBITDA of US$280 million was up 34%.

James Hardie shares are currently trading for $54.20, up 79% in 12 months despite yesterday’s sell-off.

Citi also has a positive outlook for this stock, raising its target price by 14% to $63 a share. That’s more than 16% above the current share price.

Also getting a big broker upgrade following earnings results

Which brings us to the third ASX 200 share getting a sizeable broker upgrade, online jobs classified company Seek Ltd (ASX: SEK).

The Seek share price closed down 4.6% yesterday following the release of the company’s half-year results. The stock is down another 6.3% today, with shares trading for $24 apiece at the time of writing.

Investors were hitting the sell button after Seek reported a 5% year on year decline in revenue to $597 million. EBITDA was down 11% from the prior corresponding half to $253 million.

Although Seek noted that the decrease in job ad volume that pressured its revenue could continue into the second half, the company forecast a further 10% increase in yield. Management expects costs to come down significantly from their previous guidance of $670 million for FY 2024.

Following two days of heavy selling the Seek share price is now flat over 12 months but still up 19% since the recent 30 October lows.

Macquarie was not put off by the slip in half-year earnings and revenue. The broker raised the ASX 200 share to an ‘outperform’ rating with a $29 price target.

That represents a potential upside of almost 21% from current levels.

The post Why these 3 ASX 200 shares just earned some big broker upgrades appeared first on The Motley Fool Australia.

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More reading

• Why Challenger, Hansen, JB Hi-Fi, and Temple & Webster shares are surging today
• Why Breville, James Hardie, Seek, and Strike Energy shares are sinking like stones today
• 2 ASX All Ords shares getting crushed on earnings results
• Seek share price sinks 10% as hiring slowdown hits earnings
• Up 115% in a year, Temple & Webster share price soars again today on record revenue

Citigroup is an advertising partner of The Ascent, a Motley Fool company. Motley Fool contributor Bernd Struben has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Macquarie Group and Temple & Webster Group. The Motley Fool Australia has positions in and has recommended Macquarie Group. The Motley Fool Australia has recommended Seek and Temple & Webster Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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