Codan Ltd (ASX: CDA), Bravura Solutions Ltd (ASX: BVS), and Lovisa Holdings Ltd (ASX: LOV) shares are all part of the S&P/ASX All Ordinaries Index (ASX: XAO).
But aside from that, what else do they have in common?
This week, in its Emerging Leaders Reporting season wrap & best picks report, Macquarie Group Ltd (ASX: MQG) unveiled its top stock picks following earnings season.
It also singled out three popular stocks that had been downgraded from outperform to neutral.
Those three were none other than Codan, Bravura Solutions, and Lovisa.
Why were they downgraded this week? Let's investigate.
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Codan
Codan shares have been on a tear this year, rising 91% for the year to date.
Macquarie was impressed by Codan's FY25 result, with the company beating the broker's expectations on both the top and bottom line.
Revenue grew 23% from the prior year. Organic growth grew 19%, which was well ahead of management's target of between 10-15%.
Macquarie has a price target of $27.15 on Codan shares. In light of its recent price surge to above this price target, Macquarie placed a neutral rating on the stock.
Bravura Solutions
In contrast to Codan, Bravura Solutions shares have underperformed this year. They have fallen around 10% for the year to date.
Bravura shares recently tumbled 16% on the company's FY25 result.
When outlining the positives from its FY25 result, Macquarie noted that the company's recurring revenue (ex Professional Services) was approximately 60% of underlying revenue in FY25, unchanged from FY24.
On the negative side, Macquarie said:
The impact of the one of three customer exits Bravura disclosed in November 2022 will complete migration away from Bravura to a BPO by 1 Jan 2026. This customer generated A$10m revenue (professional services, support, maintenance and hosting) in FY25. This customer was not part of the reported FY25 attrition and implies ~$5m headwind to total FY26 revenue. One of the other three customer exits from 2022 remains a client.
Macquarie has placed a price target of $2.03 on Bravura shares, which is roughly where they are trading at the time of writing. Accordingly, Macquarie believes it is fairly valued today.
Lovisa
Lovisa shares have been among the best post-liberation day recovery stories. Since April 7, they are up an impressive 100%.
Macquarie noted that Lovisa has delivered strong sales growth of 14.2% in FY25. This was driven by 1.7% like-for-like growth, as well as continued store network growth.
Lovisa opened 131 net new stores in FY25, bringing its global total to 1,031. Interestingly, US store openings regained momentum, with 23 stores opened during the year. However, Europe was the largest contributor, with 86 new stores opened during the period.
Macquarie has a price target of $40.90 on Lovisa shares. Following Lovisa's recent run rally, the share price at the time of writing currently sits above this at $41.93, justifying a neutral rating.
