ASX 300 stocks continue to lift and are showing strength after the US Presidential election concluded overnight.
The S&P/ASX 300 Index (ASX: XKO) is up less than half a percent from the open on Thursday morning, extending this year's gains to above 8%.
However, not all stocks in the index behave in the same way, and brokers have changed their ratings on several ASX 300 stocks.
And not all ratings are made equal. Brokers have made downgrades to Harvey Norman Holdings Ltd (ASX: HVN) and Domain Holdings Australia Ltd (ASX: DHG), but upgraded James Hardie Industries (ASX: JHX) in the same stroke of the pen.
Let's take stock of the latest changes.
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ASX 300 shares downgraded
ASX 300 stock Harvey Norman was cut to a sell from Goldman Sachs in a note to clients yesterday. Previously, it rated the share a hold.
Goldman has concerns over Harvey Norman's potential market share loss in a "challenged" retail environment. For this same reason, retail stocks were hammered in H2 of 2024.
The broker has also lowered its target price by 11%, now valuing the ASX 300 share at $4 apiece.
It also noted that Harvey Norman's competitors appear to be capitalising on market share gains, especially in electronics and tech, thereby eating the company's lunch.
Goldman also revised its FY25 forecasts for the retail giant, anticipating sales of $4.13 billion and pre-tax earnings of $628 million – both of which are below consensus.
The broker also reduced valuation multiples on its Australian and New Zealand franchises, along with an increase in the property cap rate.
Domain sliced to hold
Bell Potter also downgraded Domain Holdings to a hold, trimming its target price to $3.20 in the process.
Bell joins colleagues at Goldman Sachs, who reiterated their rating on the ASX 300 stock as a hold in a note to clients overnight.
The broker's outlook hinges on concerns over Domain's growth despite the company projecting 3-5% listings growth for FY25.
Domain's Q1 performance also saw an 8% rise in listing volumes, surpassing competitor REA Group Ltd (ASX: REA).
But Goldman warns this growth may wane in the second half.
It sees downside risks due to increased free listings, which could potentially dilute future yield growth for the company. It values the ASX 300 stock at $2.87, below Bell Potter's valuation.
The Bright Spot: James Hardie
In contrast, James Hardie received an upgrade from JP Morgan, which raised its rating to overweight – analogous to a buy call.
According to The Australian, it raised the stock to a buy with a price target of $55, about 13% above where the ASX 300 stock currently trades.
Goldman Sachs also confirmed James Hardie as a buy in an October note.
The broker revised its earnings estimates slightly lower but remains confident in James Hardie's long-term prospects, largely due to its focus on premium products within the building materials sector.
We revise our estimates ahead of JHX's 2Q25 results in November to reflect recent input cost data. We lower our FY25e Adj NPAT -2% to US$653m towards the lower end of management's US$630-700m guidance range.
We lower our 12m [price target] to A$55.00 from A$55.85. We do not view these changes as material, and there is no change to our investment view. Retain Buy
ASX 300 stock takeaway
While Harvey Norman and Domain Holdings are facing headwinds, brokers are bullish on James Hardie's potential.
However, the fate of these ASX 300 stocks ultimately comes down to the returns of the underlying companies.
Time will tell what eventuates from here.
