0359 GMT - BlueScope Steel's profit warning wasn't entirely unexpected by RBC Capital Markets. BlueScope now expects 1H earnings before interest and tax of between A$270 million and A$310 million. The midpoint of the range represents a 25% cut to its earlier guidance. "Given its offshore peers have confirmed similar challenging trading patterns both across Asia and North America, we think it is not surprising to see BlueScope downgrade its 1H guidance today," analyst Owen Birrell says. The seaborne steel market remains in oversupply as China exports surplus material, he says. RBC expects BlueScope's earnings to bottom out in FY 2025, but efforts to cut costs will help. RBC maintains its outperform rating on BlueScope. Shares are down 0.8% at A$21.02. ([email protected]; @dwinningWSJ)

0346 GMT - Temple & Webster keeps its bull at Macquarie despite what looks like a slowdown in sales growth at the Australian furniture retailer. The investment bank's analysts tell clients in a note that on-year sales growth appears to have slowed to 18% from 26% at the start of its fiscal year. They lower their forecast for 1H sales growth to 21% from 26%, but point out that the Black Friday and Christmas period is yet to come and likely to prove a significant contributor. The analysts cut their near-term EPS forecasts but roll forward their valuation, driving a 5.0% lift to their target price to A$13.55. Macquarie keeps an outperform rating on the stock, which is down 1.0% at A$12.32. ([email protected])

0306 GMT - Zip's net transaction margin may have peaked due to the Australian payment provider's focus on acquiring new customers, Citi analyst Siraj Ahmed reckons. He points out that U.S. bad debts as a percentage of transactions were higher in the September quarter than three months earlier. U.S. customer numbers grew almost 3% over the same period. Zip has previously said that new customers are more likely to miss repayments than established users, which weighs on the margin, a key measure of profitability. Still, Ahmed tells clients in a note that analysts are likely to raise their forecasts following Zip's 1Q update. Citi has a neutral rating and A$2.90 target price on the stock, which is up 12% at A$3.13. ([email protected])

0213 GMT - SiteMinder's relatively full valuation and the early-stage nature of its new products keep Goldman Sachs analysts neutral on the stock. They tell clients in a note that the accommodation-tech provider's 1Q update showed higher-than-expected growth in property additions, but they think that a normalization in global travel demand is likely to have a continued impact on transaction margins and uptake of products by customers. Progress on new products is seen as positive, but some way from making a meaningful contribution. GS lifts its target price by 7.0% to A$6.10. Shares are up 1.2% at A$6.70. ([email protected])

0149 GMT - Myer's acquisition of Premier Investments' apparel brands could lift the Australian department-store operator's earnings-per-share by about 28%, E&P analyst Kade Madigan says. He tells clients in a note that the A$30 million in annual synergies anticipated by Myer will likely come from the enlarged group's improved purchasing power and lower costs thanks to Myer's existing infrastructure. Madigan adds that newly disclosed earnings from the apparel brands business are lower than he had anticipated. ([email protected])

0137 GMT - Morgans is confident Northern Star Resources will deliver strong annual earnings, despite an unexpectedly weak 1Q performance. Northern Star produced 394,000 oz of gold in 1Q, falling short of 402,000 oz forecast by Morgans. That means Northern Star's output skews to 2H to meet annual guidance. Still, Morgans raises its FY 2025 net profit forecast by 34% as gold prices have been on a tear. Gold settled at US$2,742.90/oz on Monday, its second-highest closing price ever. Morgans raises its price target on Northern Star by 19% to A$20.18/share. Northern Star is up 1.8% at A$17.60. ([email protected]; @dwinningWSJ)

0013 GMT - While some of Sandfire Resources' financial metrics in 1Q were softer than Jefferies expected, the overall narrative was pleasing. Namely, Sandfire continues to reduce its debt burden. Sandfire repaid A$44 million of borrowings in 1Q, contributing to its net debt falling to A$345 million at the end of September. The base metals miner said it had A$190 million in cash at the end of 1Q. "With FY 2025 set to see a full year of Motheo and Matsa delivering consistent production, we expect to see ongoing debt reduction over the course of FY 2025," says analyst Mitch Ryan, referring to Sandfire's operations in Botswana and Spain. Jefferies retains a hold call on Sandfire. ([email protected]; @dwinningWSJ)

0002 GMT - Paladin Energy will struggle to achieve annual guidance for production from its Langer Heinrich mine in Namibia, reckons Macquarie. Paladin is targeting output of 4.0 million-4.5 million pounds of U3O8, a common compound of uranium, in FY 2025. But the company has faced some setbacks recently, and will shut the mine for two weeks in November. Macquarie cuts its forecast for Langer Heinrich output to 3.5 million pounds. It says the operation would need to run at more than 85% of nameplate capacity in 3Q and 4Q to hit the bottom end of Paladin's guidance range. "This is possible, but looks less probable now to us, given stockpile feed grade variability and a number of plant adjustments and bottlenecks that will need to be dealt with," Macquarie says. ([email protected]; @dwinningWSJ)

2352 GMT - Lithium and base metals miner IGO loses a bull in Macquarie following a mixed 1Q. IGO's Greenbushes joint venture beat expectations for lithium production and sales. However, Macquarie said costs at IGO's other businesses appeared to be higher. These costs include corporate overheads, exploration spending, and expenses tied to the closure of some mines. Macquarie estimates some A$60 million of additional costs, which contribute to a 49% cut in its EPS forecast for FY 2025. "Without clear catalysts on the horizon, we see the stock moving in line with the underlying commodity," says Macquarie. It downgrades IGO to neutral, from outperform. ([email protected]; @dwinningWSJ)

2341 GMT - It's likely that lithium spodumene prices have bottomed and will remain stable at current levels until the end of this year, says Morgans. Existing supply appears able to meet demand in the short term. However, Morgans expects the balance to shift toward the end of the decade when demand outpaces the growth in supply. Also, higher lithium prices are necessary to encourage miners to go ahead with new projects. "So while prices may remain low in the near term, there is strong evidence for higher prices long term," analyst Adrian Prendergast says. ([email protected]; @dwinningWSJ)

(END) Dow Jones Newswires

October 29, 2024 00:00 ET (04:00 GMT)