There have been a large number of results releases this week with big names handing in their report cards.
Let's now see what the team at Morgans thinks about three key results. Here's what you need to know:
Lovisa Holdings Ltd (ASX: LOV)
Morgans felt that this fashion jewellery retailer's full year results were a touch mixed. However, this was forgiven thanks to its strong trading update.
But with its shares racing higher, the broker has downgraded them to an accumulate rating (from buy) with an improved price target of $44.50 (from $35.00). Commenting on the ASX 200 stock, Morgans said:
LOV's FY25 result was mixed, with top line growth driven by accelerating store expansion and improving comp sales in 2H, although this was offset by higher operating costs resulting in EBIT up 8.2%, which was 6% below forecast. Despite the earnings miss, the trading update for the first 8 weeks of FY26 was ahead of expectations, with LFL store growth up 5.6% and total sales up 28%.
We have lowered our EBIT by 8% and 5% in FY26 and FY27, driven by higher sales offset by slightly lower gross margins and higher operating costs, D&A and interest related to store count. We have moved to an ACCUMULATE rating with a target price of $44.50 (from $35.00).
Telstra Group Ltd (ASX: TLS)
Another popular stock that has released its full year results is telco giant Telstra.
In response to its conference call, the broker has boosted its earnings estimates and valuation. However, it isn't enough for a better rating. Morgans has retained its hold rating with an improved price target of $4.80. It explains:
On TLS's FY25 conference call management highlighted expectations for materially higher D&A in the coming years. At the time we lifted our FY26/27 D&A by 6-7%. Following a better understanding around the shape of this higher D&A we have reduced our FY26/27 D&A forecasts by 2-3%. Our D&A forecasts now lift ~3% YoY. Lowering our D&A lifts our FY26/27 EPS by ~3.5%. Our Target Price lifts 2% to $4.80 and we retain our HOLD recommendation.
Woolworths Group Ltd (ASX: WOW)
Finally, this supermarket giant delivered a result that was in line with expectations. But this was overshadowed by a disappointing outlook statement which showed tepid sales growth.
In light of this, the broker hasn't seen a reason to change its recommendation. It continues to rate Woolworths as a hold with a reduced price target of $28.25. Morgans said:
While WOW's FY25 result was broadly in line with expectations, the outlook disappointed, with early FY26 showing subdued sales growth in the core Australian Food business and further investment required to enhance customer value perception. Management acknowledged that enhancing value, improving retail execution, and streamlining processes will take time, with FY26 expected to be a 'transitional year' as they work through current challenges.
While WOW holds a portfolio of quality assets, a significant turnaround is required following a challenging FY25. With customers remaining highly value-conscious and competitive pressures persisting, we believe any recovery will take time. As such, we see limited upside in WOW's share price until management can demonstrate tangible progress on its strategy. We continue to prefer Coles Group (COL) within the Staples sector.
