Ord Minnett, a prominent Australian financial services firm, has recently increased its 12-month share price targets for two buy-rated ASX 200 stocks. This strategic move comes as the S&P/ASX 200 Index (ASX: XJO) experienced a slight decline of 0.44% on Friday, closing at 8,671.4 points.
The two stocks that have caught the attention of Ord Minnett include Pinnacle Investment Management Group Ltd (ASX: PNI) and Cleanaway Waste Management Ltd (ASX: CWY). Both companies have shown promising potential for investors, prompting the broker to adjust its forecasts and price targets.
Pinnacle Investment Management: A Strategic Move
Pinnacle Investment Management, a key player in the financial sector, offers third-party distribution, fund infrastructure, and support services to affiliates and investment managers. Despite a minor dip of 0.27% in its share price on Friday, Pinnacle has seen a remarkable 37% increase over the past year, trading at $21.79.
Ord Minnett has maintained a buy rating on Pinnacle and raised its 12-month price target from $24.80 to $26.10, suggesting a potential upside of nearly 20%. This decision is based on upgraded earnings estimates for FY26 and FY27, driven by anticipated growth in funds under management.
Ord Minnett stated, “Despite our performance fee downgrades, we still see strong inflows for the June quarter, noting our forecast is circa 6% above broader market expectations. Post the review, our FY25 EPS estimate falls 3.2%, while our FY26 and FY26 forecasts increase 3.8% and 5.1%, respectively.”
This adjustment reflects a strategic approach to capitalize on Pinnacle’s growth trajectory, even as the broker reduced its FY25 forecast to account for lower expected performance fees in the latter half of the fiscal year.
Cleanaway Waste Management: Expanding Horizons
Cleanaway Waste Management, a leader in waste management, industrial, and environmental services in Australia, has also seen a positive shift in its share price, rising 0.7% on Friday to $2.87, marking a 5% increase over the past year.
Ord Minnett has issued an accumulate rating for Cleanaway, slightly raising its 12-month price target from $3 to $3.10. This implies a potential upside of 8% for investors. The broker’s optimism stems from Cleanaway’s strategic acquisitions, including the recent purchase of Citywide Waste in Melbourne for $110 million, completed on July 1.
The acquisition of Contract Resources for $377 million, approved by the ACCC on July 4, further positions Cleanaway for growth. This move provides exposure to the resources sector, enhancing Cleanaway’s capabilities in decommissioning and remediation work.
“Melbourne-based Citywide Waste services circa 1500 council, commercial, and industrial customers, including Melbourne City Council, and also involves a 35-year lease on the Dynon Road transfer station in West Melbourne. The much larger Contract Resources acquisition, due to be completed by the end of July, is also a sound business move,” commented Ord Minnett.
These strategic acquisitions have led to an upgrade in Cleanaway’s FY26 earnings per share (EPS) forecast by 2.8% and the FY27 estimate by 7.6%, justifying the increase in the price target.
Implications for Investors
The revised price targets for Pinnacle Investment Management and Cleanaway Waste Management reflect Ord Minnett’s confidence in these companies’ growth prospects. Investors looking for potential opportunities in the ASX 200 may find these stocks appealing, given the broker’s positive outlook.
As the financial landscape continues to evolve, the strategic moves by Pinnacle and Cleanaway highlight the importance of adaptability and foresight in navigating market dynamics. Investors are advised to consider these factors when making investment decisions, keeping in mind the broader economic context and industry trends.
With the financial year unfolding, the performance of these stocks will be closely monitored by market analysts and investors alike, as they seek to capitalize on the potential upsides identified by Ord Minnett.
