2256 GMT - Australian travel agent Flight Centre gets a new bull in Morgan Stanley, which likes its long-term mindset and competitive advantages of scale, brand and switching costs. "Whilst we lack conviction on timing, we are very confident Flight Centre can automate to improve margins in excess of market expectations," analyst James Bales says. MS also thinks Flight Centre can expand its share of the market without needing acquisitions, while keeping good control of costs. "On 12.7x price-to-earnings, little is factored in," MS says. The bank starts coverage of Flight Centre at overweight with a A$22.00/share price target. Flight Centre ended last week at A$16.04. ([email protected]; @dwinningWSJ)

2248 GMT - For Australian property stocks, capitalization rates are now higher than they were before the Covid-19 pandemic. Citi thinks cap rates will soon peak, which is one reason why it's broadly bullish about the sector early in 2025. Commercial real estate is typically valued based on its cap rate, or the annual net income produced by a property divided by the purchase price. Like bond yields, rising cap rates indicate falling values, and vice versa. "As rental growth across sectors started to stabilize, coupled with stabilizing asset valuations, we believe cap rates are near their peak of this cap rate cycle," analyst Howard Penny says. He notes cap rates for neighborhood retail properties are now at pre-pandemic levels. ([email protected]; @dwinningWSJ)

2237 GMT - Investors are likely to give IGO more time to turn around the Kwinana battery grade lithium hydroxide refinery it runs with China's Tianqi under the TLEA joint venture, Citi says. But FY 2025 will be a key year to show it can generate earnings in the long run, analyst Kate McCutcheon adds in a note. "Until then, Kwinana remains an overhang on the TLEA cash sweep," she says. Kwinana owes TLEA hundreds of millions of dollars in lost Ebitda and improvement capex since 3Q of FY 2022, says McCutcheon. IGO recently said it expects to realize the benefits of an October shutdown for maintenance and improvement works in March. "Time will tell," McCutcheon says. Citi keeps a neutral rating. Its target on IGO goes to A$5.40 from A$5.30. IGO ended Friday at A$4.94. ([email protected]; @RhiannonHoyle)

2218 GMT - Citi expects 2025 to be an inflection year for Australian real-estate stocks, driven by lower interest rates. The bank is currently tipping interest rates to begin falling in May, reaching a terminal rate of 3.6% over time. It is upbeat about data centers, retail property, self-storage and land lease assets. "We expect declining financing costs will provide additional tailwinds, supporting earnings growth across the broader sector," analyst Howard Penny says. Still, Citi predicts a slower recovery in Australian office markets, partly due to elevated vacancy rates. Its top picks are Goodman, National Storage REIT, Ingenia Communities, Stockland, Scentre and GPT. ([email protected]; @dwinningWSJ)

(END) Dow Jones Newswires