The team at Bell Potter has kicked off the new trading week with fresh guidance on a number of ASX shares.
However, two that have received a downgrade are Adairs Ltd (ASX: ADH) and LGI Ltd (ASX: LGI).
Lets see what the broker had to say.
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Adairs in transition phase
Adairs is a homewares and home furnishings retailer in Australia and New Zealand.
It has been struggling so far in 2026, down nearly 28% in that span.
Shares closed last week at $1.30 each.
The team at Bell Potter said in its recent report that it remains cautious on these ASX shares in the near term.
The broker said Adairs' 1H26 result saw the company delivering between the mid to high points of the downgraded guidance range provided in Oct-25.
However gross margins were towards the bottom end of the guidance range but with some good wins in the Mocka brand.
While the revenue growth of the key growth brands, Adairs (~70% of the group) and Mocka ~10% of the group) saw further improvements for the first 7 weeks of 2H26 vs 1H26, we see some headwinds for the key 4Q26 as Adairs cycles the range curation driven clearance activity in the pcp and given the current macroeconomic environment.
Based on this guidance, the broker has lowered its price target 44% to $1.40 per share (previously $2.50).
Bell Potter maintained its hold rating.
While we anticipate the current transition phase across all three brands to progress over the near term, we expect operating leverage led earnings growth to be skewed to the long term with our estimates seeing ~6% revenue growth and ~16% EBIT growth over the next 4 years (4 yr CAGR).
LGI gets a slight downgrade
LGI is engaged in the recovery of biogas from landfills, and the subsequent conversion into renewable electricity and saleable environmental products.
Its share price is down almost 12% year to date, and closed last week at $3.62.
Following its H1 FY26 results, the team at Bell Potter slightly lowered its price target on these ASX shares.
The broker said wholesale electricity prices fell again in early 2026 across the National Electricity Market (NEM). Prices dropped about 27% in Queensland and 16% in New South Wales compared to last year.
Even though electricity demand reached a record for the quarter, prices still declined because temperatures were milder and there was less price volatility.
Based on this guidance, the broker decreased its price target to $4.50 (previously $4.64).
In good news for investors, this price target still indicates a solid upside potential of nearly 25%.
The broker maintained its buy recommendation on these ASX shares.
