0419 GMT - Morgan Stanley analysts wonder how viable Appen's long-term revenue growth objectives will be against the backdrop of the Australian machine-learning company's cost cuts. They tell clients in a note that Appen's US$46 million annualized cost savings are impactful, but that the capacity to make them supports their thesis that its human-based model is less economical than competitor's automated solutions. Appen has traditionally relied on a remote human workforce to train machine learning, while some rivals have invested heavily in automating processes and have already lowered their costs. MS has a last-published underweight recommendation and A$2.00 target price on the stock, which is down 2.6% at A$2.23. (stuart.condie@wsj.com; @StuartLCondie)

0329 GMT - Seek's latest price increases surprised Macquarie analysts, who raise their EPS forecasts for the Australian job advertiser as a result. The analysts tell clients that their price-tracking efforts show that the average national ad price rose by 7% across the past two weeks to A$314. They see this supporting their yield growth forecasts and raise their EPS projections for FY 2023, FY 2024 and FY 2025 by 4%, 3% and 3%, respectively. Job ad volumes are also falling at a slower pace than they had expected, while they continue to highlight Seek's variable cost base. Macquarie keeps an outperform rating on the stock and raises its target price by 2.5% to A$33.30. Shares are 3.0% higher at A$24.19. (stuart.condie@wsj.com; @StuartLCondie)

0317 GMT - Appen's US$36 million annualized cost-savings program is necessary, given the deterioration in the Australian data-annotation company's revenue base over the last two years, Wilsons analysts say in a note. They call the program a step in the right direction, but warn of its uncertain impact on Appen's ability to return to growth and to maintain an attractive client offering. Wilsons cuts its 2023 revenue forecast by 21% on Appen's latest trading update, and lowers its target price by 10% to A$1.90. Wilsons stays underweight on the stock, which is down 2.2% at A$2.24. (stuart.condie@wsj.com; @StuartLCondie)

0152 GMT - Appen's debt facility means the Australian data-annotation company should avoid the need for a capital raise, Bell Potter analyst Chris Savage says. He tells clients in a note that he thinks Appen will utilize some of its A$20 million facility in 2H FY 2023 and increase the size of facility when it refinances. He cuts his FY 2023, FY 2024 and FY 2025 revenue forecasts by 17%, 18% and 18%, respectively, on Appen's latest trading update. Bell Potter cuts its target price on the stock by 8.9% to A$2.05 and maintains a sell rating. Shares are 1.3% lower at A$2.26. (stuart.condie@wsj.com; @StuartLCondie)

0118 GMT - Redbubble's focus on cost-reduction is prudent and de-risks the Australia-listed art marketplace's balance sheet, Goldman Sachs analysts say. Their forecast that Redbubble will burn A$66.4 million of cash in fiscal 2023 suggests a remaining A$19.6 million balance by the end of the year. They tell clients in a note that focusing on cash flow is the right strategy but that they remain cautious on the revenue growth outlook, not least with the potential that reduced investment could lower Redbubble's ability to drive sustainable growth. The broader outlook for discretionary spend is still challenging, they add. GS raises target price by 11% to A$0.59 and is neutral on the stock, which is down by 3.0% at A$0.4025. (stuart.condie@wsj.com; @StuartLCondie)

0103 GMT - There's potential for significant Xero share-price volatility if the cloud-accounting software company's FY 2024 and FY 2025 revenues fall short of market expectations, Morgan Stanley analysts say. They tell clients in a note that the stock's earnings multiple has risen to 9x from 7x since new CEO Sukhinder Singh Cassidy announced cost cuts to boost profitability. The danger that this shift in focus could temper revenue growth means the market could reassess this re-rating if future growth wobbles, they say. Their base case is for Xero to report FY 2023 revenue in-line with forecasts, which would support investors' current FY 2024 expectations. MS maintains an overweight rating and A$100 target price on the stock, which is down by 0.1% at A$92.13. (stuart.condie@wsj.com; @StuartLCondie)

0034 GMT - Australian data-annotation company Appen will likely need to raise capital unless it can identify further cost cuts, Macquarie analysts say in a note. They tell clients that a softening macro environment means they don't anticipate Appen returning to profit until 2026, which raises concerns over its capital position in 2024. Appen currently expects to exit 2023 in a neutral earnings position but the Macquarie analysts point out that it has only US$23 million of cash in the bank. They assume Appen will lean on US$150 million of debt for funding. Macquarie cuts the stock's target price by 53% to A$1.18 and lowers its recommendation to underperform from neutral. Shares are down 0.2% at A$2.285. (stuart.condie@wsj.com; @StuartLCondie)

2317 GMT - Combining Allkem with Livent is value accretive for the Australian-listed lithium company and presents an opportunity to more efficiently run their complementary assets, says RBC Capital Markets analyst Kaan Peker. He raises RBC's price target on Allkem by more than 10% to A$14.00/share. The tie-up should also offer benefits from economies of scale and further vertical integration, as well as "possible long-term asset/technology upside," Peker says in a note. "While, we are yet to integrate the companies, we have incorporated the transaction premium, plus [roughly] A$550 million of synergies." Allkem closed at A$12.91 in Sydney on Wednesday. (rhiannon.hoyle@wsj.com)

2306 GMT - Suncorp's quarterly update shows that lending growth at its bank slowed below the wider system growth over the March quarter, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. They reckon that this correlates with Suncorp's focus on managing growth levels in the bank to protect margin. "However we do note that Suncorp was previously guiding for book growth more toward system levels, not below," says GS. While Suncorp didn't provide an update on net interest margin, GS currently assumes Suncorp's NIM is tracking lower, forecasting 1.98% in 2H FY 2023 and 1.94% in FY 2024. GS says this is in line with the pressure cited by other banks over the most recent reporting season. GS stays buy rated on Suncorp. (alice.uribe@wsj.com)

22:58 GMT - Building materials supplier CSR loses a bull in Citi as emerging weakness in its aluminum business offset a 3% beat to FY 2023 Ebit forecasts. "Despite our view that the building products division is better than 1H24 expectations, we think on balance there are now too many uncertainties overhanging the stock to deliver near-term outperformance," analyst Samuel Seow says. CSR projects a FY 2024 loss of A$5 million-A$15 million in its aluminum division. At the same time, building activity could slow within months as interest rates sap demand. Citi drops to neutral, from buy, and lowers its price target by 6%, to A$5.45/share. CSR ended Wednesday at A$5.33. (david.winning@wsj.com; @dwinningWSJ)

2227 GMT - GPT will likely have to accept a deep discount to complete a deal for its 50% stake in Australia Square, Jefferies says. The asset's book value is A$628 million, but analyst Sholto Maconochie believes office valuations have declined over the past six months. "Our channel checks suggest June-23 office valuations will be down <10>

2219 GMT - Allkem's merger with Livent is unlikely to be the last deal in the current M&A wave for lithium stocks, Jefferies says. "With limited projects advanced enough to be able to deliver production growth pre-2030, the number of dance partners available for those standing on the sideline to conduct accretive M&A diminishes every day," analyst Mitch Ryan says in a note. Jefferies says the Livent-Allkem combination makes strategic sense and should be a strong tailwind for Allkem's stock. "The deal has potential to deliver improved capital returns on accelerated timelines relative to those achieved independently," says Jefferies. "That said, we see risk on a long-term basis around project delivery." (david.winning@wsj.com; @dwinningWSJ)

0459 GMT - Australia's corporate regulator is focusing on the country's pension funds, as it continues to expand its greenwashing-surveillance activities, says ASIC Deputy Chair Karen Chester in a speech to the RI Australia conference. The regulator, she says, is continuing its surveillance of the managed fund and corporate sectors, as well as progressing its surveillance of the superannuation fund sector and the wholesale green bond market. "There is a distinct pipeline," Chester adds. The regulator has made 35 interventions in response to its greenwashing-surveillance activities from July 1, 2022, to end-March, ASIC says in a report. (alice.uribe@wsj.com)

(END) Dow Jones Newswires