It has been a busy period with countless ASX 200 shares releasing their results.
The team at Morgans has been busy running the rule over them.
Three that haven't fared too well and have been hit with downgrades to their ratings are listed below. Here's what the broker is saying about them:
Endeavour Group Ltd (ASX: EDV)
Morgans wasn't overly impressed with the results of this drinks giant in FY 2025, noting that it was a touch weaker than expected.
And with the recovery in liquor spending hard to predict, it has decided to downgrade this ASX 200 share to a hold rating with a trimmed price target of $4.15. It explains:
EDV's FY25 result overall was slightly weaker than expected. A decline in Retail earnings due to subdued consumer spending was partly offset by a slight improvement in Hotels earnings. Retail sales in the early part of FY26 have remained subdued while Hotels has gotten off to a solid start. We decrease FY26-28F group EBIT by between 5-6%. Our target price declines to $4.15 (from $4.35) on the back of adjustments to earnings forecasts.
With a 12-month TSR of 5%, we move to a HOLD rating (from ACCUMULATE). While retail liquor demand is expected to improve as inflation moderates and interest rates decline, the timing and extent of any uplift remains uncertain. In contrast, the outlook for Hotels is more positive with benefits from the network renewal program beginning to materialise. However, we think short-term upside for EDV's share price may be limited with the outcome of the portfolio review not expected until 2H26 and the long-term strategy remains unclear.
Pilbara Minerals Ltd (ASX: PLS)
This lithium miner delivered a result in line with expectations in FY 2025.
However, with the ASX 200 share rallying strongly recently, the broker feels that it is now fully valued. As a result, Morgans has downgraded Pilbara Minerals shares to a hold rating with a $2.30 price target. It said:
FY25 headline numbers contained no major surprises. Higher D&A than forecast and accounting treatment of some expenditure were behind the lower underlying NPAT compared to MorgansF and consensus. PLS' FY26 strategy will focus on maximising operational performance and fully realising the benefits of the Pilgangoora expansion, while maintaining cost discipline and progressing diversification initiatives at Colina (Brazil) and P-PLS (South Korea).
PLS highlighted increased demand for its product from chemical converters but cautioned lithium prices will remain volatile and subject to sharp spikes and drops. We downgrade to a HOLD rating (from BUY) following a strong share price run with an unchanged A$2.30ps Target Price.
Reece Ltd (ASX: REH)
Finally, this plumbing parts company has also been hit by a downgrade from Morgans.
It highlights its weak earnings result in FY 2025 and uncertain outlook as reasons to be cautious. Morgans has downgraded Reece's shares to a trim rating from hold with a reduced price target of $11.10. It said:
While REH's FY25 EBIT of $548m was at the bottom end of management's guidance range of $548-558m provided in late June, the outlook remains uncertain in both ANZ and the US as the company deals with a soft housing market, cost inflation, and increased competitive threats. Management anticipates a slow recovery in ANZ with a period of soft activity still to play out. In the US, the housing market is expected to be constrained for the next 12-18 months driven by persistently high mortgage rates and affordability challenges. We decrease FY26-28F group EBIT by between 10-12%. For FY26, we forecast earnings to be lower in both regions compared to a modest improvement previously.
We note however that forward visibility remains low. Our target price falls to $11.10 (from $14.80) and we downgrade our rating to TRIM (from HOLD). While we continue to view REH as a fundamentally good business with a strong culture and long track record of growth, the operating environment remains tough (particularly in the US) with further downside risk to earnings forecasts if housing conditions remain weak and competitive pressures intensify.
