Why these 4 ASX 200 shares were just rerated by top brokers

Brokers have changed their forecasts for these leading ASX 200 shares. But why?

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Four well-known S&P/ASX 200 Index (ASX: XJO) shares were just rerated by leading brokers.

Three earned upgrades while one was downgraded.

Here's what's happening.

(Broker data courtesy of The Australian.)

Three ASX 200 shares earning broker upgrades

The first ASX 200 share getting an upgrade is The Lottery Corp Ltd (ASX: TLC), Australia's biggest lottery company.

The Lottery Corp share price is up 1.4% in morning trade today at $4.97. That sees the stock up 3.1% so far in 2024.

And the betting company could stand to benefit from the upcoming tax returns most Aussie households will be receiving. While some people will use that to pay down debt, add to savings, or invest in ASX stocks, I imagine others will he happy to take a punt with some of their upcoming refunds.

Citi sees some solid growth ahead, in either case. The broker raised the Lottery Corp to a 'buy' rating with a $5.60 price target. That represents a potential upside of just under 13% from current levels.

Lottery Corp shares also trade on a fully franked trailing dividend yield of 2.9%.

Which brings us to the second ASX 200 share getting a broker upgrade, speciality retailer Premier Investments Ltd (ASX: PMV).

Premier also could be one to benefit from the upcoming tax refunds and other cost-of-living relief measures contained in the federal budget.

The Premier share price is up 2.1% today at $29.44, which sees shares up 4.4% year to date. Premier shares also trade on a fully franked dividend yield of 4.2%.

And CLSA forecasts another potential 9% share price gain from here. The broker raised Premier Investments to an 'accumulate' rating with a $32 price target.

Rounding off the list of ASX 200 shares receiving upgrades is healthcare provider Ramsay Health Care Ltd (ASX: RHC).

The Ramsay Health Care share price is up 4.0% today at $48.85, which sees shares down 8.2% year to date. The stock trades on a fully franked dividend yield of 1.4%.

Ramsay Health Care is a company that could catch some strong tailwinds from the rapid advancement of artificial intelligence. AI is widely forecast to drive efficiencies and new treatments in healthcare over the medium to longer term.

JP Morgan is getting more bullish on its outlook for this ASX 200 share. The broker raised its rating to 'neutral' with a $50 price target, a bit more than 2% above current levels.

And one company getting downgraded

Turning to the ASX 200 share getting downgraded, we have fashion jewellery retailer Lovisa Holdings Ltd (ASX: LOV).

The Lovisa share price crashed 10.4% yesterday and is down 3.2% today, at $29.44 a share.

Despite that big sell-down, the Lovisa share price remains up 20.6% in 2024. And Lovisa shares trade on a partly franked dividend yield of 2.8%.

But investors and brokers alike have been rethinking the growth outlook for the company after it announced that CEO Victor Herrero will be exiting on 31 May next year.

Motley Fool analyst James Mickleboro highlighted why Herrero's pending departure is dimming Lovisa's medium-term outlook:

The outgoing CEO has been instrumental in Lovisa's global expansion. And while a lot of the hard work has certainly been done since his arrival in 2021, there's still a lot more to come. The market may be concerned that his exit now puts at risk the successful execution of this expansion.

The ASX 200 share was downgraded by a number of brokers including Barrenjoey, Citi, Morgan Stanley and Canaccord.

Canaccord has the lowest price target for Lovisa shares among the brokers, at $29.00. This implies that most of the pain from Herrero's upcoming exit has now already been priced into the stock.

Citigroup is an advertising partner of The Ascent, a Motley Fool company. JPMorgan Chase 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 JPMorgan Chase, Lottery, and Lovisa. The Motley Fool Australia has recommended Lovisa and Premier Investments. 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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