0330 GMT - Westpac continues to look expensive to Macquarie analysts given risks around the Australian bank's extensive tech overhaul. Maintaining an underperform rating on the stock, they write in a note that the composition of the lender's 1Q update looked a little soft. They think that costs were only lower than the market had expected due the timing of various expenditures, while margin trends look relatively soft despite stable interest rates. They reckon that this points to downside risk to revenue expectations as rates fall. Westpac's valuation multiple of 17 times fiscal 2026 earnings is in line with larger rival NAB, and at a 26% premium to ANZ, they add. Macquarie keeps a A$28.00 target price on the stock, which is down 2.4% at A$32.50. ([email protected])

0317 GMT - Temple & Webster is a good business but one that doesn't justify its current valuation, UBS analysts say. Cutting their recommendation to sell from neutral, they say that the Australian furniture retailer's stronger-than-expected December-half Ebitda was driven by currency gains and underspending on brand marketing. They see a risk that moves to reaccelerate revenue growth in the June half costs more in marketing than investors currently anticipate. They think that medium-term average analyst forecasts suggest a widespread underestimation of marketing costs. UBS raises its target price 31% to A$15.50. Shares, which gained 26% across two days following the release of the December-half result, are up 0.4% at A$18.46. ([email protected])

0240 GMT - The a2 Milk Company's bull at Citi sees the infant-formula maker's December-half result as more evidence that headwinds in China against overseas providers have dissipated. Gone are the days in which market-share gains are dominated by domestic brands, analyst Sam Teeger says. Reiterating his buy recommendation, Teeger tells clients in a note that a2 Milk is the third highest market-share gainer in China, trailing Nestle and China's Yili. Three of the top five brands are now from outside China, he observes. He sees a2 Milk gearing up for a strong fiscal 2026, with share-price catalysts including potential government stimulus, supply chain acquisitions, and capital management. Citi raises its target price 12% to A$8.20. Shares are up 2.7% at A$7.315. ([email protected])

0235 GMT - Jefferies analysts aren't ruling out more copper M&A for BHP, even after the miner's CEO, Mike Henry, said the company is firmly focused on its own projects. "We reiterate our hold rating on BHP as the company has been more aggressive than its peers in pursuing opportunistic M&A, and we believe further M&A risk remains," the Jefferies analysts say in a note. They also raise concerns about the outlook for dividends unless commodity prices surprise. "Combined with its rising net debt and organic growth pipeline, BHP's ability to deliver capital returns in excess of its base 50% payout ratio is limited unless commodity prices are much stronger than we anticipate," the analysts say. Jefferies has a A$43.00 target on BHP, which is up 0.5% at A$41.01/share.([email protected]; @RhiannonHoyle)

0149 GMT - Seek's first-half result is potentially higher quality than anticipated by the market even though earnings are slightly lower than the average analyst forecast, E&P analyst Entcho Raykovski says. The Australian job advertiser's December-half Ebitda of A$233.9 million compares with an average forecast of A$231.2 million, although it is in line with Raykovski's forecast. He writes in a note that the company's updated Ebitda guidance is in line with expectations despite some shift in spending from capital expenditure to operating expenses. With yield growth guidance upgraded, Raykovski sees reasons to be positive on the quality of the result. E&P has a last-published positive rating and A$28.30 target price on the stock, which is flat at A$24.23. ([email protected])

0133 GMT - Audinate's bulls at Morgan Stanley are happy with the audio-tech provider's insistence that current growth headwinds are cyclical rather than structural. The MS analysts tell clients in a note that the Australia-listed company's first-half results provide comfort that underlying adoption trends remain strong. They point to 31% growth in software unit sales despite customer destocking of chip, card and module inventory. Audinate also seems to be showing good cost control through what they call a challenging destocking period. MS lifts its target price 22% to A$11.00 and stays overweight on the stock, which is up 6.7% at A$10.23. ([email protected])

0101 GMT - Westpac's 1Q update will lead to less conviction on capital management, Morgan Stanley says. Westpac's CET 1 ratio--a key measure of its ability to withstand financial shocks--missed MS's estimate by 0.2%. "As a result, we've reduced our medium-term buyback forecasts by A$1 billion, although we still assume another A$0.15/share (or A$500 million) special dividend at the 1H result," analyst Richard E. Wiles says. Still, MS says Westpac's board may choose not to pay this special dividend, noting it has a new CEO. MS also cites "the 'ramp up' in Project UNITE, its non-housing loan growth ambitions, and forecast for a proforma 1H CET1 ratio of just 11.8%" as reasons why Westpac might be cautious about additional capital management. ([email protected]; @dwinningWSJ)

2333 GMT - Analysts at Macquarie say Australian construction and real estate firm Lendlease has "delivered better than expected to date" on its new strategy, which aims to simplify the business and sell assets. Although Macquarie says the effort will be a drawn out process with a degree of valuation and earnings risk, it still supports the new strategy--and sees it reducing the company's risk profile and improving returns and earnings quality. Macquarie, writing after Lendlease's 1H result, increases its target price on the stock to A$7.24 from A$7.08 and keeps its outperform rating. Lendlease is at A$6.71 today. ([email protected]; @Mike_Cherney)

2321 GMT - Rate cuts are expected to translate into a recovery for steel and copper demand across the OECD in the near term, following a period of softness in 2024, BHP says in its 1H report. "However, potential trade tensions present a risk to the recovery in developed economies and across the globe," it says. BHP says India is a bright spot for commodity demand. "While we anticipate a marginal cyclical deceleration across the Indian economy in the next two years, our view on its underlying structural growth potential remains intact," BHP says. ([email protected]; @RhiannonHoyle)

2320 GMT - Dexus has faced headwinds in its office portfolio for several periods and now challenges are emerging in logistics as well. "Logistics is slowing down in terms of occupancy, negative comparable growth and rising incentives," Jarden analyst Lou Pirenc says following Dexus's 1H result. That will add a new brake on earnings momentum, the bank says. Dexus's shares have risen some 16% since a low in January. "We believe the 11.2% discount to net tangible assets and 4.7% distribution yield will need stronger signs of an adjusted funds from operations recovery," says Jarden, which has a neutral call on Dexus. ([email protected]; @dwinningWSJ)

2318 GMT - BHP's 1H earnings result contains few surprises and should be neutral for its stock, according to Citi analyst Paul McTaggart. Ebitda is in line with expectations, and there are no changes in production or cost guidance. BHP does provide some more details on the impact of the Samarco settlement and growth in the Copper South Australia business, McTaggart says. Citi has a buy rating and A$46.00 target on BHP. The stock is down 0.7% at A$40.52/share. ([email protected]; @RhiannonHoyle)

2231 GMT - It will likely be some time before Bendigo and Adelaide Bank's core earnings improve. That's the conclusion of Citi after the Australian lender reported a 1H result featuring a 4-5% core earnings miss relative to consensus hopes and signaled costs are on the rise. Analyst Brendan Sproules expects Bendigo's costs to rise by 8.5% in FY 2025 and by 3.5% in FY 2026, reflecting ongoing inflation and rising investment. "With relatively flat forecast revenue over this time frame given existing Net Interest Margin headwinds and rate cuts, we forecast core earnings to trough in late FY 2026," Citi says. It retains a sell call on Bendigo's stock. ([email protected]; @dwinningWSJ)

2221 GMT - Barrenjoey sees plenty of positives in Infratil's purchase of more equity in CDC Data Centres. Infratil says it will exercise pre-emption rights, along with Australia's Future Fund, for a 12.04% stake put up for sale by Commonwealth Superannuation Corp. Infratil will buy around 1.58% of CDC shares for A$216 million, with the Future Fund acquiring the rest. Analyst Eric Choi says the deal implies Infratil's enterprise value is now some A$17 billion, above Barrenjoey's A$15.8 billion estimate and the last independent expert valuation of A$13.4 billion. Barrenjoey also thinks Infratil may now be able to appoint a majority of directors to CDC's board. ([email protected]; @dwinningWSJ)

2210 GMT - Early signs of a turnaround at Baby Bunting remain intact, says Ord Minnett following the retailer's 1H result. Baby Bunting reported a 1H proforma net profit of A$4.8 million and said trading remained solid in the first seven weeks of 2H, with like-for-like sales slowing only slightly compared to 2Q. It reaffirmed guidance for a FY 2025 proforma net profit of A$9.5 million-A$12.5 million. Ord Minnett's forecast is a touch above the midpoint of that range at A$11.2 million. "Overall, Baby Bunting is making positive progress on improving sales, operating margins and profit momentum," analyst James Casey says. "With early signs of turnaround emerging, we maintain our positive recommendation." ([email protected]; @dwinningWSJ)

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2202 GMT - Reliance Worldwide's stock is likely to underperform today as soft annual guidance overshadows a small 1H earnings beat, suggests Barrenjoey. Reliance reported 1H operating earnings of A$142.8 million, but said underlying sales growth of 5.4% in the Americas was partly due to the pull-forward of demand from 2H. Analyst Brook Campbell-Crawford says this will be a focus of conversations with management, along with weaker 1H sales in Europe, Middle East and Africa. "We believe guidance implies low single digit-mid single digit downgrades to consensus FY 2025 EPS," Barrenjoey says. "We expect the stock to underperform on a softer outlook, albeit sell-side top line estimates for 2H were optimistic." Reliance ended Monday at A$5.37. ([email protected]; @dwinningWSJ)

2155 GMT - Barrenjoey analyst Ben Brayshaw says Australian construction and real estate company Lendlease "continues to make good strides toward simplification" following its fiscal 1H result. Brayshaw points out that Lendlease has announced or completed A$2.2 billion in asset sales so far, an important component of a strategy unveiled last year to streamline its business. He adds that the key highlight in the 1H result was the strong growth in construction backlog to A$6.2 billion, a 59% increase from the prior year. Despite that progress, Brayshaw maintains an underweight rating on Lendlease shares, cutting his price target slightly to A$6.30 from A$6.40. More broadly, the company reported a A$48 million statutory net profit in 1H, compared to the A$136 million loss in the prior period. Lendlease ended Monday at A$6.77. ([email protected]; @Mike_Cherney)

0434 GMT - Woodside Energy's financial line-item guidance raises questions about the sustainability of its dividend, Citi says. "Consensus expectations for a US$0.60/share final dividend look unrealistic against guided 'other costs' for 2024 that were materially higher on non-cash mark-to-market for hedges," analyst James Byrne says. Woodside guided to 'other costs' of US$1.7 billion-US$1.9 billion. That was much higher than Citi's prior US$500 million forecast. "We think the board may consider equity raising via a dividend reinvestment plan," says Citi, which has a sell call on the stock. Woodside is down 2.8% today. ([email protected]; @dwinningWSJ)

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