Broker UBS has released a bunch of new research reports this week, profiling companies across a wide spectrum of sectors.
I’ve selected three reports on companies which the broker believes will perform particularly well over the next 12 months.
Let’s see who they like.
DigiCo Infrastructure REIT (ASX: DGT)
This company is a data centre builder and operator, which has experienced a year of substantial share price swings.
The shares have traded as high as $3.07 and as low as $1.59 over the past 12 months, and are currently changing hands for $2.05.
UBS said recent highlights included DigiCo executing a 15 year contract for 71 megawatts of capacity at its SYD1 data centre with a global technology firm.
That data centre is now fully contracted, UBS said.
The broker said DigiCo’s expansion plans are fully funded, with no need to raise capital from equity.
UBS said it was also pleasing to see no change to the company’s forecast for underlying earnings this year.
UBS has a price target of $3.60 on DigiCo shares. If achieved, this would be a 76.5% upside.
Champion Iron Ltd (ASX: CIA)
UBS reduced its price target on Champion Iron shares after a weaker than expected September quarter preliminary result, but it still remains well above the current share price.
The broker said that the company’s volume recovery was good, however the net realised price for their iron ore was disappointing.
They said that the capture of premium pricing was tracking softer than expected, “driven by a combination of marketing execution, which the company controls to an extent, and elevated freight, which it largely does not, together compressing the net price realised”.
UBS added:
While management had guided premiums to build materially into Q3 to Q4 FY27, the weaker Q2 realisation has prompted us to adopt more conservative short to medium term freight assumptions, which flow through net realisation to drive our FY28/29 earnings cuts.
The broker has a price target of $3.60 on Champion Iron shares compared to $2.35 currently.
This would be a 44.7% increase if achieved.
Netwealth Group Ltd (ASX: NWL)
UBS said custodial net flows were soft for Netwealth, “reflecting ongoing budget related impacts on adviser activity combined with headwinds from higher interest rates”.
The broker said Netwealth offered compelling value at the current share price and was trading at a 43% discount to its five-year average.
UBS has a price target of $22 on Netwealth shares compared to $15.31 currently.
If achieved this would be a return of 43.6%.
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More reading
- WiseTech Global vs Netwealth: Which ASX tech stock could double from here?
- This high-quality ASX 200 share could rise 60%
- 5 things to watch on the ASX 200 on Friday
- Champion Iron posts $403.9 million Q2 FY2027 revenue in preliminary results
- DigiCo Infrastructure REIT locks in major SYD1 contract and reaffirms guidance
Motley Fool contributor Cameron England 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 Netwealth Group. The Motley Fool Australia has positions in and has recommended Netwealth Group. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.