ASX shares continue to deliver in 2024, with the benchmark S&P/ASX 200 Index (ASX: XJO) up 5% this year.
But the macroeconomic tides are shifting. Persistent inflation, higher interest rates, and cost–of–living pressures are the dominant forces.
Consequently, broker opinions on ASX shares are also shifting.
Analysts have changed ratings on two companies on Friday, Harvey Norman Holdings Ltd (ASX: HVN) and Capricorn Metals Ltd (ASX: CMM), revising both stocks as buys.
Let's dive into the details and explore what these changes mean for investors.
Broker bullish on ASX shares
Being one of Australia's leading retail giants, Harvey Norman has faced a challenging year.
In its FY24 report, it posted a 30% drop in profit before tax, driven by weaker consumer spending and rising costs.
This led to a cut in its full-year dividend, which may have contributed to the recent tumble in its share price. It is settled at $4.61 per share before the open on Friday.
Evans & Partners is bullish on the company and has raised its rating on the stock to 'positive', according to The Australian.
The firm's view is a contrarian one, with the consensus of analyst estimates rating Harvey Norman stock a hold, according to CommSec.
Goldman Sachs is one of those brokers, maintaining its neutral rating following the company's full-year results.
Goldman revised down its FY25-27 sales forecast by 3–5% and valued the ASX share at $4.50 apiece.
The broker remains cautious about the retailer's growth potential, particularly in comparison to peers:
We remain Neutral, with a new TP of A$4.5/sh (previously A$4.6/sh) implying 4% TSR. Whilst the consumer environment is improving into 1H25 and that we expect a higher level of innovation will
benefit the consumer electronics category, we remain concerned that HVN's comp sales remain below key peers including JBH and Officeworks.
Time will tell if Evans & Partners' positive views are vindicated.
Capricorn Metals shining away
On the other hand, Capricorn Metals is earning praise from brokers. Macquarie raised the gold stock to a buy and increased its price target by 19% to $6.30.
Macquarie joins a long list of brokers who are bullish on the ASX share. According to CommSec, six out of the eight analysts covering it now say it's a buy.
Bell Potter retained its buy rating recently as well and values the company at $6.49 per share. This gives the stock a potential upside of 17% based on Capricorn's current share price.
Capricorn posted "record operating cash flows" of $158 million in FY24. Plus, its pre-tax margin of 47% places it among the top-performing gold producers in the ASX.
The broker also projects an increase in Capricorn's gold production to 270,000 ounces per annum in the future.
Foolish takeaway
Both of these ASX shares have been raised to buy ratings from top brokers on Friday. Capricorn stock is up 30% in the past year, whereas Harvey Norman is up 15%.
