0321 GMT - Morgan Stanley resumes coverage of REA Group with an overweight rating, with analysts pointing to the Australian real-estate advertiser's proven record of lifting both prices and yield by double-digit percentages. The MS analysts are already bullish on this basis but see further potential upside, pointing out that lower borrowing costs are historically a catalyst for listings growth and real-estate turnover. With Australia's unemployment rate still low and the country's central bank heading into an easing cycle, they tell clients in a note that they want to be holding REA stock. MS has a A$250.00 target price on the stock, which is up 1.0% at A$220.08. REA is controlled by News Corp., which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

0257 GMT - Westpac shareholders can expect another special dividend and an extension of the Australian lender's share buyback, Morgan Stanley analyst Richard E. Wiles writes in a note. He reckons the bank will declare another A$0.15 special dividend alongside its 2H result on Nov. 4, and top up its existing buyback by another A$1 billion. As for the 2H ordinary dividend, Wiles sees Westpac lifting it to A$0.77 from A$0.75 in 1H. He says Westpac has made good progress in its turnaround efforts, but he will be looking for commentary on key challenges including margin trends, tech investment and mortgage competition. MS has an equal-weight rating and a A$29.70 target price on the stock, which is up 0.5% at A$31.01. (stuart.condie@wsj.com)

2301 GMT - Australian refining margins improved slightly last week, but are at a level where Jefferies would expect the federal government's Fuel Security Services Payment to kick in. Refining margins averaged US$8.06/bbl last week, just above the US$7.69/bbl achieved in the prior week. Still, for Ampol and Viva Energy to benefit from the fuel subsidy, refining margins would need to stay at current levels for a full quarter of a calendar year, analyst Michael Simotas says. In contrast to refining, retail margins remain above historical levels, which suggests the industry continues to be rational. "Higher retail margins and elevated premium penetration provide some offset to lower mobility volumes," Jefferies says. (david.winning@wsj.com; @dwinningWSJ)

2252 GMT - Ampol and Viva Energy's upcoming quarterly updates could disappoint investors, says Goldman Sachs. That's because "regional refining margins fell over the quarter, impacted by lower regional product cracks and a collapse in clean-dirty freight spreads, which we estimate at -US$1.8/bbl," analyst Henry Meyer says in a note. GS estimates Ampol had a US$5/bbl gross refining margin in 3Q. It assumes a planned turnaround at Ampol's Lytton plant in Queensland state reduced this margin by US$2/bbl compared to 2Q. "Lytton gross margin could exceed our estimates if apparent one-off crude price lags which impacted 2Q are reversed," GS says. (david.winning@wsj.com; @dwinningWSJ)

2247 GMT - Woodside Energy could beat expectations for production, sales volumes and revenue in 3Q, according to Goldman Sachs. The bank's output forecast of 54.6 million barrels of oil equivalent is around 9% higher than consensus hopes, and reflects stronger LNG sales at the North West Shelf and Pluto LNG projects in Australia. It also assumes Woodside's majority owned Sangomar oil project in Senegal delivers 90,000 b/d of oil on average in the quarter. If achieved, this "could tighten 2024 production guidance toward the upper end of current 185-195 million BOE," analyst Henry Meyer says. GS currently forecasts annual production of 194 million BOE. (david.winning@wsj.com; @dwinningWSJ)

2241 GMT - Guinea supply disruptions are tightening bauxite and alumina markets more, says Shaw & Partners, which is bullish on Australia's Metro Mining. It refers to reports that bauxite exports from Guinea Alumina Corp, or GAC, have been suspended due to customs issues. GAC, a unit of Emirates Global Aluminium, produces about 12 million tons of bauxite annually, representing some 10% of the country's output. In a note, analyst Andrew Hines highlights that EGA sources most of its bauxite from Guinea but recently acquired a trial cargo from Metro Mining that will be shipped this quarter. "The Al Taweelah alumina refinery is similar in design to the Yarwun refinery in Queensland and a Weipa style bauxite is likely to be a suitable feedstock," Shaw says. (david.winning@wsj.com; @dwinningWSJ)

2232 GMT - Platinum Asset Management's 1.9% improvement in funds under management in September is comforting, but the business remains in outflow, says Bell Potter. That's significant given it is a takeover target of Regal Partners. "Against Regal Partners, Platinum are playing with a weak hand," says analyst Marcus Barnard. "While it does have a turnaround strategy, it is uncertain, long term and difficult to quantify." If Regal Partners walks away then Platinum's shares would fall heavily, Bell Potter says. The bank's adjusted EPS forecast falls by 18% in FY 2025 and by 14% in FY 2026. Platinum's shares are up 29% since Sep. 9. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

October 14, 2024 00:00 ET (04:00 GMT)