0144 GMT - An updated Japan supply agreement "future proofs" Lynas Rare Earths, UBS analyst Dim Ariyasinghe says in a note. The 12-year deal, combined with a recently renewed 10-year Malaysia plant license, helps shift the focus of Lynas's "next chapter" to value and margin expansion, says Ariyasinghe. He says the updated supply deal "is obvious in hindsight given the continued and escalating tensions between China and Japan." The revised deal includes a floor price for neodymium-praseodymium. While the agreement is unilateral, it should support prices for Western rare earths producers more broadly in future, Ariyasinghe says. "In our view it is increasingly unlikely any subsequent Western business be conducted at a price point dramatically different [lower] than the US$110/kilogram price," he says. Lynas is up 13% at A$19.96 a share. ([email protected]; @RhiannonHoyle)

0129 GMT - AGL Energy loses its bull at Macquarie, where the Australian power retailer is seen entering an earnings downgrade cycle. Lowering their recommendation to neutral from outperform, a note from one of the investment bank's analysts warn that the near-term outlook for earnings is bleak until coal plants close in fiscal 2029. With government ensuring that replacement capacity is in place prior to closure, the note cautions that oversupply will weigh until then. AGL is favorably leveraged to the first coal plant closures, but Macquarie lowers its fiscal 2028 earnings forecast by 28% and only sees power prices recovering after that. Target price falls 7.6% to A$9.61. Shares are down 5.1% at A$9.06. ([email protected])

0119 GMT - Macquarie analysts see further earnings risks for Australian classifieds providers given the backdrop of rising local interest rates. They worry that interest-rate hikes in response to inflationary pressures including from fuel could put pressure on listings volumes at employment marketplace Seek and News Corp-controlled real-estate advertiser REA. They add that a stronger Australian dollar would also be a headwind for vehicle advertiser CAR Group, which has operations in the U.S., South Korea and Brazil. Looking to the broader debate over the potential impacts of artificial intelligence, they warn against expecting near-term cost reductions from automation. Any savings will probably be reinvested, they add. News Corp is the parent company of Dow Jones & Co., publisher of The Wall Street Journal and Dow Jones Newswires. ([email protected])

2357 GMT - A de-rating of Australian bank stocks is seen by Morgan Stanley analysts as having become more likely due to the economic impacts of U.S. and Israeli military action against Iran. The MS analysts had already flagged interest-rate rises and an economic slowdown as potential de-rating catalysts. They now see a higher possibility of these triggers being pulled given the Australian economy's sensitivity to supply shocks and energy security risks. With fuel prices rising, they see the Reserve Bank of Australia having to juggle both inflationary pressures and growth risks as it sets interest rates. ([email protected])

2342 GMT - Australian furniture retailers Nick Scali and Temple & Webster are disproportionately exposed to rises in freight costs related to the Iran conflict, Macquarie analysts warn. Citing the large size and low retail price density of furniture, the investment bank's analysts see risk in the companies' coming freight-cost renewals in the event that disruption related to the conflict is prolonged. Pressure on consumer spending from rising local interest rates and broader inflation, including from fuel, means it will be hard for retailers to pass on costs to their customers, the analysts add in a note to clients.([email protected])

2332 GMT - Zip keeps its bull at Macquarie despite the installment-payment provider's recent earnings reset. A note from one of the investment bank's analysts looks past the Australian company's moderated operating leverage and flags an expectation of medium-term growth. The analyst thinks that Zip's U.S. net transaction margin will improve sequentially in both the March quarter and June quarter. Loan losses are rising relative to total transaction value, but the note points out that this is a function of Zip bringing on new users. The company can quickly remove defaulters, the note adds. Macquarie keeps an outperform rating and A$3.35 target price on the stock, which is down 0.9% at A$1.67. ([email protected])

2132 GMT - Australian stocks look set to extend their rally when the local market opens. Local stock futures are up by 0.3% ahead of Wednesday's session, suggesting that the S&P/ASX 200 will add to its 1.1% rise of the previous session. The benchmark index is still down by 5.5% since early last week, with investors spooked by the ramifications of U.S. and Israel strikes on Iran. Officials at Australia's central bank meet next week to decide their next move on interest rates. U.S. equities provided a largely soft lead. The Nasdaq Composite was flat, but the DJIA lost 0.1% and the S&P 500 slipped 0.2%. ([email protected])

(END) Dow Jones Newswires