Broker puts fresh buy ratings and tips 36% upside for these earnings results winners 

Two ASX shares enjoyed a strong rise yesterday following the release of earnings results and study results. 

Cuscal Ltd (ASX: CCL) shares rose almost 8% yesterday, while AVITA Medical Inc (ASX: AVH) rose 4%. 

This prompted fresh buy ratings from the team at Bell Potter, as well as upgraded price targets. 

What did the companies announce?

Cuscal shares rose strongly yesterday following the release of full-year results. The company reported a 49% jump in statutory NPAT to $42.7 million for FY26, boosted by acquisitions of Indue and Paymark.

Underlying NPAT was up 20% to $46.2 million, while underlying net operating income rose 20% to $347.7 million. Aggregate transaction volumes grew 12% over the year and the final dividend of 7 cents takes the full-year dividend to 11.5 cents per share. 

Following yesterday’s rise, Cuscal shares are now up 93% over the last year. 

Meanwhile, investors were gobbling up AVITA Medical shares after the announcement of its study results. 

According to the release, it has produced evidence that its PermeaDerm treatment may replace expensive cadaveric skin grafts with a product that works similarly, costs ~70% less, and is far easier to prepare.

The full releases from both companies can be found here: 

• Cuscal full-year results 
• AVITA clinical study announcement.

Upgraded outlook for Cuscal following earnings results 

Following the full-year results, the team at Bell Potter provided upgraded guidance for Cuscal shares. 

The broker said the underlying FY26 NPAT came in at $46.2 million, ahead of expectations. 

Bell Potter also said the balance sheet remains healthy, and noted the final dividend was increased to 7 cents per share fully franked. 

For FY27, management is guiding to mid-20% volume and underlying NPAT growth. Although acquiring growth is expected to be weaker, Bell Potter sees this as implying organic earnings growth of more than 10%, with volumes having picked up since June.

Based on this guidance, the broker retained its buy recommendation and raised its price target to $6.50 (previously $5.80). 

From yesterday’s closing price, this indicates an upside potential of almost 16%. 

Big upside for AVITA Medical

Bell Potter has also raised its outlook for AVITA Medical shares following its study results. 

Bell Potter is more bullish on the company because its products are showing strong cost and clinical benefits. 

PermeaDerm significantly reduced treatment costs and preparation time while achieving similar healing results to cadaver skin, although it is still a small part of AVH’s revenue.

The bigger story is RECELL (AVITA’s main product), where revenue growth is picking up, reimbursement uncertainty is improving, and cash burn is moderating. 

Bell Potter believes the broader product range could also help it sell more products into existing hospitals.

Based on this guidance, the broker retained its buy recommendation on the company and raised its price target to $3.70 (previously $2.10). 

This indicates a 36% upside from current levels. 

The post Broker puts fresh buy ratings and tips 36% upside for these earnings results winners  appeared first on The Motley Fool Australia.

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Motley Fool contributor Aaron Bell 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 Avita Medical. The Motley Fool Australia has recommended Avita Medical. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.