0333 GMT - Nine Entertainment's operating deleverage was offset in 1H by strong market share gains but is likely to become a headwind as Australia's TV ad market cycle turns, Macquarie analysts say in a note. They tell clients that they expect the deleverage to continue. They are also cautious about Nine's digital publishing assets to withstand a softer macro backdrop, noting that subscriber levels have remained static in the past six months. The Macquarie analysts trim their EPS forecasts for FY 2023, FY 2024 and FY 2025 by 12%, 10% and 11%, respectively, to reflect softer publishing revenue, soft TV ad markets, and higher streaming content costs. Macquarie cuts target price by 6.1% to A$1.84 but stays neutral on the stock, which is up 0.75% at A$2.015. (stuart.condie@wsj.com; @StuartLCondie)

0328 GMT - Nine Entertainment's improved guidance for TV cost growth in FY 2023 implies a smaller offset to emerging revenue headwinds than Goldman Sachs analysts had hoped for. The Australian media conglomerate expects costs to rise by a low-single-digit percentage, compared with previous guidance for 7% growth. That is only a slight improvement, the GS analysts say in a note to clients. They lower their TV earnings forecasts for Nine's three years through FY 2025 by 5%-11% to reflect caution in the broader TV ad market. The decline in FY 2025 also reflects the costs of broadcasting the Paris Olympics, they say. GS maintains a buy rating on the stock and trims the target price by 2.0% to A$2.45. Shares are up 1.25% at A$2.025. (stuart.condie@wsj.com; @StuartLCondie)

0259 GMT - Nine Entertainment's 1H TV revenue share was stronger than anticipated by UBS analyst Lucy Huang, who is confident that the media conglomerate can continue to grow share across its key businesses. Nine is executing well on strategy in challenging macro conditions that remain the key downside risk to estimates, Huang tells clients. She says in a note that Nine's 3Q guidance could point to improving ad-market momentum in February and March, but stresses that things are very uncertain. UBS maintains a buy rating on the stock but trims target price by 4.0% to A$2.40. The stock is up 1.0% at A$2.02. (stuart.condie@wsj.com; @StuartLCondie)

0151 GMT - The 2H benefit of Brambles's significant price rises will more than offset the pallet supplier's deferred 1H operating expenses, Jefferies analysts say. The company's 1H performance was in-line with Jefferies' expectations, and its improved FY outlook reflects the impact of price rises, the analysts say in a note. Tight pallet availability continues to support pricing, they add. Brambles still expects to pay higher prices through 2H FY 2023 than in FY 2022, suggesting to Jefferies that lower lumber prices are likely to become apparent from FY 2024. Jefferies has a last-published underperform rating and A$10.40 target price on the stock, which is up 8.1% at A$13.05. (stuart.condie@wsj.com; @StuartLCondie)

0112 GMT - The strong 1H performance of Brambles's Europe, Middle East and Africa business was a key factor in the pallet supplier beating RBC Capital Markets' earnings forecast. Group EBIT of US$549 million was about 5% ahead of analyst Owen Birrell's forecast, despite the Americas and Asia-Pacific units falling slightly short of his expectations. Birrell tells clients in a note in response to the results that EMEA revenue was 3% higher than he had expected, with EBIT coming in 11% stronger than he had forecast. He describes the overall result as a solid beat. RBC has a last-published outperform rating and A$14.00 target price on the stock, which is up 7.9% at A$13.02. (stuart.condie@wsj.com; @StuartLCondie)

0024 GMT - It's becoming clear to Jefferies that pizza has less pricing power than other fast foods. That's a challenge for Domino's Pizza Enterprises, which got a significant boost as consumer behavior changed during the Covid-19 pandemic. In a note, analyst Michael Simotas says the pandemic benefit is now unwinding. "Deterioration in Domino's Pizza Enterprises's franchisee profitability is a concern and we fear Domino's Pizza Enterprises may have opened too many stores on the back of unsustainably favorable conditions," Simotas says. Franchisees will likely remain reluctant to open stores, particularly as funding costs are increasing, he says. So, Domino's Pizza Enterprises may need to offer additional support, compounding pressure on margins, Simotas adds. (david.winning@wsj.com; @dwinningWSJ)

0013 GMT - Lottery Corp continues to have plenty of options to flex a strong balance sheet, says Macquarie in a note. The bank estimates Lottery Corp's net debt-to-Ebitda will be 2.9 times at end-June, below a target of 3.0-4.0 times. "Whilst we have previously suggested a share buyback to re-leverage, we see the accretion as an impediment, and as such, see it as unlikely in the near term," Macquarie says. "On the flip side, we see Lottery Corp paying dividends at the high end of the 80-100% target based on net profit pre-significant items." It sees a 95% payout ratio as likely. (david.winning@wsj.com; @dwinningWSJ)

0007 GMT - Ramsay Health Care's leverage looks elevated to Macquarie. The private hospital operator's net debt-to-Ebitda increased to 3.5 times at the end of December, from 3.3 times six months earlier. It was as low as 1.0 times in December 2021. "While this sits below a revised covenant of 4.0 times (increased from 3.5 times), we see this as a potential constraint to near-term growth initiatives," Macquarie says in a note. It points out that Ramsay has lowered capex guidance for its businesses in Australia and the U.K. Ramsay now expects total capex of A$705 million-A$810 million in FY 2023, below previous guidance of A$850 million-A$1.0 billion. (david.winning@wsj.com; @dwinningWSJ)

2348 GMT - Should investors in Eagers Automotive stop worrying about margin normalization? That's a question posed by Morgan Stanley following the Australian car dealership's annual result. "We still feel prudent incorporating some normalization, but our 3.9% 2025 pretax profit margin remains above circa 3% pre-Covid," analyst Chenny Wang says in a note. MS cites two drivers for this upbeat outlook for margins: order backlogs are embedding elevated margins while Eagers is showing good cost control. MS raises its price target on the stock by 9.5% to A$15.00/share. Eagers is up 3.3% at A$13.43. (david.winning@wsj.com; @dwinningWSJ)

0549 GMT - Reece's sales volumes are likely to further weaken in 2H FY 2023 as construction markets continue to soften, Ord Minnett analyst James Casey says. He points out that the Australian plumbing supplies manufacturer's 1H sales growth was almost entirely due to product inflation, and came despite 2Q volume contraction of 2% in Australia and New Zealand, and 6% in the U.S. Recent increases in mortgage rates, which diminish consumers' spending capacity, will further soften demand for products and hit near-term growth prospects, he says in a note. Ord Minnett maintains a hold rating on the stock and trims target price by 3.1% to A$15.50. Shares closed 3.8% lower at A$15.89. (stuart.condie@wsj.com; @StuartLCondie)

0514 GMT - Potential buyers of EML Payments shares face considerable uncertainty over how long it will take for its strategic and investment decisions to translate into financial returns, Wilsons analysts say. The Australia-listed payments company says its strategic review and operational overhaul is making good headway, but the timeline still looks unclear to Wilsons analysts. Material investment in staff, systems, platforms and processes must be rationalized over time to return EML to a leaner state, they say in a note to clients. Wilsons maintains a market-weight rating on the stock but cuts target price 7.9% to A$0.58. Shares are in a halt at A$0.58. (stuart.condie@wsj.com; @StuartLCondie)

0457 GMT - Seek's strategy and product changes at its Asia business have the potential to significantly improve the Australian job advertiser's share price over the next three years, Morgan Stanley analysts say. They think that the changes could lift revenue growth, reduce fixed costs and bring earnings margins closer to those at Seek's Australia and New Zealand unit. Their bull-case scenario envisages the changes adding between A$2.80 and A$4.00 per share over the next three years. Seek keeps an overweight rating on the stock and trims its target price 12% to A$30.00 to reflect lower domestic listing trends. Shares are 0.7% higher at A$24.42. (stuart.condie@wsj.com; @StuartLCondie)

(END) Dow Jones Newswires