0219 GMT - Any long-term risk to Cochlear's margins are skewed to the downside given that growth prospects appear to be largely confined to the adult market, UBS analyst Laura Sutcliffe says in a note. She observes that the pediatric hearing-implant space is well penetrated in many markets, leaving the total adult market's 6%-7% volume growth as Cochlear's main growth driver. Yet pricing power is weaker in this market and margins could be pressured by the need for heavier marketing spend, Sutcliffe adds. UBS initiates coverage of the stock with a neutral rating and A$255.00 target price. Shares are up 0.4% at A$245.88. (stuart.condie@wsj.com; @StuartLCondie)

0208 GMT - ResMed is the top pick among Australian healthcare stocks for UBS analyst Laura Sutcliffe, who thinks that the market is underestimating the cumulative benefits of rival Philips' product recall. She sees ResMed's sleep division exceeding average analyst revenue forecasts for FY 2024, FY 2025 and FY 2026 by 5%, 6% and 7%, respectively, citing the compounding effects and longevity of the dual-listed company's current competitive advantages. Gross margin is also expanding due to product mix, she adds. UBS initiates coverage of the breathing-tech manufacturer's U.S.-listed stocks with a buy rating and $290 target price. Shares last traded at $225.46. (stuart.condie@wsj.com; @StuartLCondie)

0200 GMT - The early signs for Qantas's FY 2024 performance look positive to UBS analysts, who point to the Australian carrier's intakes and implied cash flow. Investors studying Qantas's latest update will likely focus more on what can be gleaned about FY 2024 than on the FY 2023 profit guidance, which was stronger than the UBS analysts had anticipated. The airline's net debt guidance implies strong cash flow, they say. Qantas expects A$2.7 billion-A$2.9 billion of net debt at June 30, significantly lower than its A$3.7 billion-A$4.6 billion target range. UBS has a last-published A$7.60 target price and neutral rating on the stock, which is down 1.9% at A$6.375. (stuart.condie@wsj.com; @StuartLCondie)

0151 GMT - The continued mortgage headwinds facing Westpac prompt Morgan Stanley analysts to downgrade their recommendation to equal-weight from overweight. They tell clients in a note that the average analyst forecast for Westpac's margins is over optimistic given the uncertain economic outlook. The MS analysts also point to a disappointing change to the bank's cost targets and the softer outlook given at this month's 1H result. Weak mortgage and business loan growth also needs to be taken into account, they say. MS trims its target price on the stock by 7.9% to A$21.00, placing Westpac second to ANZ in order of preference among Australian banks. Shares are down 0.1% at A$21.04. (stuart.condie@wsj.com; @StuartLCondie)

0141 GMT - National Australia Bank's below-market growth in Australian mortgages and above-average exposure to small and medium-sized business loans will not compensate for margin headwinds from deposits, Morgan Stanley analysts say in a note. They cut their recommendation to underweight from equal-weight, telling clients in a note that the drivers of NAB's operating performance from 2020 through 2022 are losing steam. Investor expectations remain high despite slowing loan growth and increased costs, they add. MS cuts its target price on the stock by 8.7% to A$25.30. Shares are down 0.4% at A$26.455. (stuart.condie@wsj.com; @StuartLCondie)

0100 GMT - Sonic Healthcare's EPS trough in FY 2024 looks deeper to UBS than investors appreciate. "We think the company will still be contending with labor cost headwinds as the ability to cut more out comes to an end on top of lower sales growth than consensus factors into its largest market, the U.S.," analyst Laura Sutcliffe says in a note. UBS starts Sonic at sell with a A$31.00/share target price, predicting that its FY 2024 growth will be around half of the 5% rise that consensus forecasts suggest. "Sonic has the lowest near-term EPS growth on offer among our coverage and we think investors will be inclined to go elsewhere for now," UBS says. Sonic is down 2% at A$35.51. (david.winning@wsj.com; @dwinningWSJ)

0058 GMT - Goldman Sachs analysts reiterate their sell call on Commonwealth Bank of Australia, emphasizing its premium to global peers and exposure to inflationary pressures. They tell clients in a note that CBA's skew to consumer banking leaves it more exposed to elevated mortgage competition and the slowdown in mortgage volumes anticipated by GS. The lender's 3Q trading update was solid, but valuation and macro headwinds keep the analysts cautious on the stock. GS has a A$84.97 target price on the stock, which is flat at A$98.87. (stuart.condie@wsj.com; @StuartLCondie)

0050 GMT - Qantas's latest share buyback announcement leaves RBC Capital Markets analysts wondering whether the Australian carrier is mulling additional capital management options or a major step-up in fleet investment. They say the A$100 million increase in Qantas's buyback program leaves plenty of untapped debt, raising the potential for an announcement at its FY 2023 results in August. Its FY 2023 guidance is in-line with market expectations and removes any ambiguity in the near-term outlook, they add. They say in a note that Qantas's guidance for pre-tax profit of A$2.45 billion will narrow the spread of analysts' forecasts, which had ranged from A$2.2 billion to A$2.6 billion. RBC has a last-published sector-perform rating and A$6.75 target price; shares are down 1.5% at A$6.40. (stuart.condie@wsj.com; @StuartLCondie)

0047 GMT - The risk of an interloper gatecrashing Allkem's merger with Livent appears low to Citi. In a note, analyst Kate McCutcheon says investors have asked about a possible rival bid more than any other point about the lithium companies' plan to create a $10.6 billion entity. She highlights remarks by Allkem's CEO that the company isn't for sale and never has been. Rio Tinto, which has shown some interest in lithium, isn't likely to consider a $15 billion deal to get a big foothold in the sector based on comments by its CEO at a recent briefing in mid-April, Citi adds. (david.winning@wsj.com; @dwinningWSJ)

0040 GMT - Investors have jumped aboard Webjet ahead of the online travel agency's FY 2023 result on Wednesday, prompting RBC to speculate that expectations may now have run too far. RBC downgrades Webjet to sector perform, from outperform, noting that consensus forecasts for FY 2023 have moved above company guidance. "We believe this presents us with a dynamic whereby an 'insufficient beat' could disappoint," says analyst Wei-Weng Chen in a note. "Based on our analysis of Webjet's trading multiple versus its historic average, we believe this threshold could be set at a circa 11% beat of guidance (broadly in-line with RBC's estimate of a 10% beat)." (david.winning@wsj.com; @dwinningWSJ)

0021 GMT - City Chic may have to further write down inventory as the Australian clothing retailer continues to aggressively discount stock, Wilsons analysts say in a note. They tell clients that the level of discounting at City Chic's Europe, Middle East and Africa business almost borders on stock liquidation. Group trade at the start of its fiscal 2H was weak and has continued to deteriorate, driven by the heightened promotional activity, they add. Wilsons maintains a market weight rating on the stock and cuts target price by 28% to A$0.36. Shares are 2.6% lower at A$0.37. (stuart.condie@wsj.com; @StuartLCondie)

0011 GMT - With no remaining suitors, Tyro Payments looks fundamentally expensive amid macro headwinds and its exposure to discretionary spending, Jefferies analyst Wei Sim says. The Australian payments-terminal provider relies on nonhealth spending for 88% of its total transaction value and Potential Capital's decision to withdraw from discussions removes a crucial catalyst for the stock, Sim says in a note. There is potential for further guidance downgrades against the backdrop of a deteriorating macro environment, he adds. Jefferies has an underperform rating and A$1.25 target price on the stock, which is up 1.6% at A$1.30. (stuart.condie@wsj.com; @StuartLCondie)

(END) Dow Jones Newswires