0400 GMT - Guzman Y Gomez's bears at Goldman Sachs isn't getting too excited by the pace of the Australian fast-food operator's local expansion. The investment bank's analysts point out that the Mexican-themed chain needs to step up the pace of new store openings if it is to hit its reiterated target of 31 new Australian outlets across FY 2025. They observe that Guzman Y Gomez opened five in its fiscal 1Q, half the number it managed in 1Q FY 2024, a year in which it opened 23 new stores. GS has a last-published sell rating and A$33.20 target price on the stock, which is down 0.4% at A$38.56. (stuart.condie@wsj.com)

0352 GMT - Netwealth's upbeat commentary and better-than-expected September-quarter fund flows are already fairly captured by the Australian wealth manager's share price, Bell Potter analyst Hayden Nicholson writes in a note. Netwealth's net flows of A$3.9 billion were about 8% stronger than Nicholson had anticipated, and he now expects momentum to accelerate. He acknowledges the company's confidence around the outlook for the full year, as well as improved technological and customer-experience capabilities, but keeps a hold rating on the stock. He lifts his target price 8.8% to A$26.00. Shares are up 1.4% at A$27.53. (stuart.condie@wsj.com)

2310 GMT - Mexican fast-food chain Guzman y Gomez can achieve like-for-like sales growth of 8% in FY 2025, says Morgans, which had previously forecast a 6% rise. "In our view, 8% comparable sales growth could still prove conservative given it assumes comparable sales fall from 8.7% in the 1Q to 7.8% for the remainder of FY 2025," analyst Billy Boulton says. Yet like-for-like sales growth accelerated through 1Q and Morgans points out that sales achieved a year ago become easier to beat. "We think there's a case to be made for comparable sales growth to continue accelerating from here and that Guzman y Gomez could potentially deliver +10% comparable sales for FY 25," Morgans says. It retains a "hold" call on the stock. (david.winning@wsj.com; @dwinningWSJ)

2259 GMT - Arcadium Lithium shareholders should view Rio Tinto's $6.7 billion takeover offer as compelling, says Morgans. That's because Arcadium Lithiumwould otherwise require significant funding to deliver its growth projects. Also, "current depressed lithium market fundamentals would likely hold the company back in achieving such a valuation in the near term in the absence of this offer," analyst Annabelle Sleeman says. The chances of a competing bid are low and a deal is likely to proceed, especially given there is no major shareholder on Arcadium Lithium's register, Morgans says. (david.winning@wsj.com; @dwinningWSJ)

2219 GMT - Jefferies analysts David Stanton and Vanessa Thomson will have an eye out for progress on CSL's efforts to expand gross margin in its key Behring unit at an upcoming R&D day on Oct. 22. The analysts say those efforts are likely to take time. But they point out the company is in the process of implementing a more efficient plasma collection network using new Rika machines, which CSL has said may reduce the amount of time it takes for the donation procedure by some 30%. The Jefferies analysts figure that CSL could generate a gross margin improvement of 600 basis points just from the Rika device in the U.S., though they expect most of the gain will be in FY 2026 and beyond. "All in all, we believe CSL remains a strong franchise over the medium term," they conclude. (mike.cherney@wsj.com; @Mike_cherney)

2214 GMT - Australian wealth management platform Netwealth's strong 1Q prompt Macquarie to raise its expectations for FY 2025 net flows to A$15.1 billion, noting management has a high level of confidence in the outlook. "Looking further ahead, we have increased our net flow assumptions to A$12.5 billion per annum (from A$11.0 billion), which delivers a longer-term Ebitda margin of 55%," Macquarie says. While the bank thinks Netwealth's valuation remains stretched, citing a price-to-earnings multiple of 57x, it doesn't see many catalysts that could push its shares lower in the near term. Macquarie, which retains a neutral call on the stock, raises its price target by 26% to A$26.50/share. Netwealth ended Thursday at A$27.16. (david.winning@wsj.com; @dwinningWSJ)

2210 GMT - Australian banks appear to be making efforts to retain existing home-loan customers, Macquarie analysts say after surveying the country's mortgage brokers. The analysts point to responses indicating that 30% of customers have renegotiated their mortgages over the past six months, which is a higher percentage than a year earlier. About 25% of customers are also on lower rates than those offered to new borrowers, the analysts tell clients in a note. Commonwealth Bank's Bankwest, Westpac and Bendigo and Adelaide Bank are perceived as those most favorably disposed to renegotiation, Macquarie adds. (stuart.condie@wsj.com)

2207 GMT - Woodside Energy's capex commitments prompt Macquarie to downgrade the stock to neutral from outperform. Macquarie thinks Woodside's acquisitions of LNG project developer Tellurian and the Beaumont ammonia project in the U.S. effectively extend its capex cycle to 2030. As a result, a lower dividend now looks likely, the bank adds. "Woodside is driving an aggressive growth strategy, and as a result we forecast a dividend payout cut to 60% in our forecasts is necessary to ensure gearing doesn't run to levels materially above the 20% guardrail," Macquarie says. Its price target falls 18% to A$27.00/share. Woodside ended Thursday at A$25.74. (david.winning@wsj.com; @dwinningWSJ)

2136 GMT - Australian wealth management platform Netwealth's solid start to FY 2025 doesn't shift Jefferies from a bearish call on the stock. Netwealth reported a record rise in funds under administration of A$7.4 billion in 1Q, exiting the period with FUA of A$95.4 billion. "Whilst a strong update, Netwealth will require elevated inflows and new records in order to maintain positive share price momentum," analyst Simon Fitzgerald says. "With the stock trading on a 64x FY 2025 price-to-earnings ratio, we view the balance of risk and reward tilted to the former." Jefferies raises its price target by 17% to A$21.16/share, but that's well below Netwealth's closing price of A$27.16 on Thursday. (david.winning@wsj.com; @dwinningWSJ)

0900 GMT - Heidelberg Materials' limited like-for-like growth forecast for 3Q Ebitda and a tight consensus range make it difficult to see the next results as a significant catalyst, Jefferies analysts say in a research note. The German building materials company's weakness across Western and Northern Europe are anticipated to keep revenue like-for-like in decline, with North America also expected to forecast tough volumes, Jefferies says. Asia appears weak and while Australia is reported to be stable, India price and volumes are down, they say. The company's Africa-Mediterranean region is expected to be a highlight: "We forecast up mid-high single-digit like-for-like improvements in both revenue and Ebitda," they say. Shares trade 1.4% lower at 97.80 euros. (nina.kienle@wsj.com)

(END) Dow Jones Newswires

October 11, 2024 00:05 ET (04:05 GMT)