0153 GMT - Earnings for Ampol and Viva Energy are being eroded by weaker refining margins, say Macquarie analysts, who cut their 2024 EPS estimates by 13% for both companies. Still, the analysts keep outperform ratings on both stocks, which have fallen sharply from an April peak. The analysts say earnings downgrades from refining have been partially offset by stronger 3Q retailer margins in diesel. "We think this pullback has dramatically improved risk/reward for investors," while "China stimulus should help margins," they say. Macquarie has a A$35.75 target on Ampol, which is up 3.1% at A$31.36. It has a A$4.10 target on Viva, which is up 3.6% at A$3.035. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0112 GMT - Tracking-app provider Life360 is added to Goldman Sachs' Asia-Pacific conviction list. With Qantas Airways and Lynas Rare Earths getting cut, Life360 and cloud-accounting software provider Xero are the only Australia-listed stocks on the list. GS points to analyst Chris Gawler's belief that the location-tracking company is in the early stages of its multi-year revenue growth opportunity, with Ebitda forecast to rise to US$108 million in 2026, from US$21 million in 2023. (stuart.condie@wsj.com)

0112 GMT - A proposed pivot to underground mining at Arcadium Lithium's Mt. Cattlin site isn't a strategic fit for the company, according to Macquarie analysts, who reckon a sale could be possible when lithium market conditions improve. At a recent investor day, the lithium company already signaled it could look to jettison non-core brine and hard-rock tenements elsewhere, say the analysts. Macquarie raises its target on the miner's Australian stock by 4% to A$5.30/share to incorporate new guidance. It keeps an outperform rating. Arcadium Lithium is up 2.0% at A$4.15/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0053 GMT - CAR Group's offshore growth potential helps the vehicle advertiser keep its status as Jefferies' pick of Australian classifieds stocks. Analyst Roger Samuel points out that web visits to CAR's overseas businesses have been exceptionally strong, and suggests that the recent U.S. rate cut should support consumer confidence for recreational vehicles and powersports. Samuel tells clients in a note that Australian private listings appear to have peaked, but that dealer listing remain stable compared with recent months. Used-car prices in Australia are still higher than prior to the Covid-19 pandemic, he adds. (stuart.condie@wsj.com)

0043 GMT - New Zealand dairy cooperative Fonterra could have scope for capital returns whatever happens in its effort to sell its consumer business, Macquarie analysts say in a note. They tell clients that so long as Fonterra's core business remains strong, the size of any sale price for the consumer unit isn't important. Fonterra's new return-on-capital target suggests that the company is confident that it can sustain current earnings, with upcoming IT and digital investment implying that returns will grow toward 13% by FY 2030. Macquarie lifts its target price 2.3% to NZ$5.74 and keeps an outperform rating on the stock, which is up 0.65% at NZ$4.62. (stuart.condie@wsj.com)

0034 GMT - E&P analyst Phillip Kimber sees nothing in Constellation Brands' 2Q result to shift his view that luxury will be the main driver of FY 2025 earnings growth at Treasury Wine Estates' Americas business. Kimber calls attention to Constellation's observation of green shoots across its largest higher-end wine brands, although he acknowledges that this has been supported by additional promotional activity. He also sees an implication that Constellation expects a strong improvement in wine and spirits sales growth across its fiscal 2H. Australia-listed Treasury is much more strongly skewed to luxury wine than Constellation is, Kimber adds. (stuart.condie@wsj.com)

2340 GMT - Jefferies analysts Michael Simotas and Naveed Fazal Bawa are still upbeat on Australia-based vintner Treasury Wine Estates, despite signs in competitor's Constellation Brands' 2Q result that the U.S. wine market is struggling. Constellation said 2Q net sales in wine and spirits fell 12.5%, but the Jefferies analysts point out that Constellation also said there are "green shoots" in its higher-end portfolio. That's good news for Treasury's U.S. business, which skews toward luxury price points. The analysts add there's still upside for Treasury from recent U.S. acquisitions, as well as growth and earnings certainty from China's removal of tariffs on Australian wine. The Jefferies price target on Treasury is A$15.50/share, 29% higher than yesterday's close. (mike.cherney@wsj.com; @Mike_Cherney)

2336 GMT - Cochlear shakes off its bear at Citi on the assumption that the hearing-implant manufacturer can maintain the pace of revenue growth set over the past decade. Noting a 13% share-price decline since the Australia-listed company's annual result announcement, analyst Mathieu Chevrier tells clients that he thinks Cochlear can keep growing annual revenue at the 10% seen over the past decade. He writes in a note that ongoing investment in sales and marketing, coupled with R&D, should support this growth. Citi lifts its target price 20% to A$305.00 and raises its recommendation to neutral from sell. Shares are at A$287.70 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

October 04, 2024 01:01 ET (05:01 GMT)