0207 GMT - CSL's forecast that therapeutic-product gross margins will return to pre-Covid levels by FY 2026-FY 2028 looks very conservative to Jarden analysts. They tell clients in a note that they are cheered by the fact that the Australian pharmaceutical company still expects margins at its CSL Behring unit to eventually recover to levels seen in FY 2019. Margin improvements will be supported by reductions in plasma costs and manufacturing efficiencies, the analysts reckon. The slower-than-anticipated improvement after bottoming in 1H FY 2023 contributes to Jarden's lower profit forecasts, but the analysts'overweight rating remains intact. Jarden cuts its target price by 7.1% to A$322.48. Shares are down 2.7% at A$279.48. (stuart.condie@wsj.com; @StuartLCondie)

0146 GMT - CSL's long-term health looks robust despite the Australian vaccine giant's warning of stronger currency headwinds, Morgan Stanley analysts say. They tell clients in a note that the recovery in CSL's gross margins has been delayed by six-12 months, rather than derailed. Gross margins will gradually improve due to a strong improvement in collection volumes, softer donor fees and softer growth in fixed costs, and should be back at FY 2019 levels by FY 2026-FY 2028, they say. MS cuts its target price by 4.1% to A$325.00 but stays overweight on the stock, which is down 2.5% at A$280.03. (stuart.condie@wsj.com; @StuartLCondie)

0055 GMT - In IAG's commercial book, the only area it is seeing flat pricing is in directors and officers insurance, says Jarrod Hill, the Australian insurer's group executive, intermediated insurance Australia. Speaking at IAG's 2023 investor day, Hill says this comes after significant increases over recent years. With respect to the market in general, he says that this is the "longest firm pricing market we've seen in commercials in my 30 years in the industry." At the same time, Hill says that while the commercial portfolio was recently "a few points off on retention," IAG is still confident of achieving the rates it needs in its portfolios. (alice.uribe@wsj.com)

0045 GMT - IAG says claims costs in its motor division are stabilizing, with volumes returning to pre-Covid levels in March last year. Still, speaking at the Australian insurer's 2023 investor day, Julie Batch, group executive for direct insurance Australia, says claims inflation challenged IAG's portfolio in August, September and October of 2022. "We were pricing in 8-10% inflation.. We observed 15-16%, so that really hit us hard in those months," she says. In response, IAG immediately started pushing through higher rates. But Batch sees stabilization ahead for motor as rain leaves the system, and on property IAG is experiencing lower frequency on non-perils claims. (alice.uribe@wsj.com)

0030 GMT - IAG is likely to continue to have to reprice its policies, as it manages increases in its perils allowances and inflated reinsurance prices, says the Australian insurer's CEO Nick Hawkins. Speaking at IAG's investor day, he says the insurer has heightened concerns about affordability for customers amid rising insurance rates. "There's material rate changes flowing through pretty much all our portfolios across Australia and NZ, and in fact across our entire industry," he says. At the same time, Hawkins says IAG sees an outlook of continued inflation and that while it may moderate, it will still be present. "We don't expect reinsurance prices to fall off a cliff, so we expect that will still be a challenging environment," he says. (alice.uribe@wsj.com)

0002 GMT - The market appears to be overly pessimistic about Seven West Media's earnings outlook, Morningstar analyst Brian Han says in a note. Han tells clients that the Australian media conglomerate's current share price appears to assume that annual Ebitda will fall by an average of more than 10%, which he describes as a doomsday scenario. He reckons this assumes that Seven's TV offering becomes sidelined in advertisers' search for mass-market exposure and that Seven makes no inroads into on-demand broadcasting. Morningstar maintains a A$0.60 fair-value estimate on the stock, which last traded at A$0.39. (stuart.condie@wsj.com; @StuartLCondie)

2353 GMT - IAG looks to be on track to hit its financial targets, says Morningstar analyst Nathan Zaia in a note. In a review of the Australian insurer's investor day, he says that management's reaffirmation of guidance for 10% gross written premium growth in FY 2023 was in line with Morningstar's expectations. The research company notes this is well ahead of the 5.7% GWP growth in FY 2022, adding that it is "overwhelmingly driven" by rate increases across almost all the insurer's portfolios. Beyond FY 2023, Morningstar continues to assume that GWP growth moderates, averaging around 6% per year over the five years to FY 2027.(alice.uribe@wsj.com)

2352 GMT - Australian casino operator Star Entertainment is a long way from being able to offer investors clarity on its earnings outlook and balance-sheet position, Macquarie analysts say. They point out in a note to clients that there is a wide spread in analysts' FY 2024 earnings forecasts, which highlights the degree of uncertainty facing its operations. The final impacts of regulatory changes and penalties have yet to be settled, while covenant relief could also be on the cards, the analysts say. They trim their FY 2024 Ebitda forecast by 3% to include the impact of the delayed opening of a Brisbane casino. Macquarie cuts its target price 7.4% to A$1.25 and stays neutral on the stock, which last traded at A$1.13. (stuart.condie@wsj.com; @StuartLCondie)

2345 GMT - IAG's margin recovery is taking longer amid ongoing reinsurance headwinds and emerging affordability issues for its customers, says Morgan Stanley analysts in a note. The investment bank has its forecasts for the FY 2023 margin set at 9.2%, rising to 14% in FY 2024 and almost 15% in FY 2025. MS keeps its target price unchanged at A$4.75/share, as it expects strong pricing, capital management and favorable weather to support the stock near term. IAG was last up 2.6% at A$5.23/share.

2334 GMT - IAG looks to be tracking in generally the right direction after some challenges over recent years, says Morgans analyst Richard Coles in a note. In a review of IAG's investor day, the broker notes that while IAG slightly lifted its expected medium-term return on equity target range, it simultaneously lowered medium-term insurance margin expectations. Overall, Morgans thinks that the Australian insurer should see earnings momentum improve into FY 2024. But with the stock currently trading at less than 10% to the broker's target price, Morgans maintains its hold call. Morgans raises its target price 5.7% to A$5.54/share. IAG was last up 2.6% at A$5.23.(alice.uribe@wsj.com)

2326 GMT - Frontier Digital Ventures faces headwinds in Pakistan due to the impact of elevated interest rates there, Bell Potter analyst Michael Ardrey says. He tells clients in a note that the Australian online classifieds investor's part-owned property site Zameen likely faces volume challenges from heightened borrowing costs. He notes the State Bank of Pakistan's monetary policy committee also observed a double-digit decline in auto volumes, which relates to Frontier's part-owned PakWheels venture. More positively, Ardrey says web traffic to both sites rose significantly in May. Bell Potter cuts target price 6.7% to A$0.83 and maintains a buy rating on the stock, which last traded at A$0.35. (stuart.condie@wsj.com; @StuartLCondie)

2323 GMT - The reinsurance market is still taking its toll on Australian insurer IAG, Citi analyst Nigel Pittaway says in a note. With perils likely to again overrun IAG's revised allowance in FY 2023, the actual FY 2024 margin headwind is likely to be higher than Citi had previously expected, Pittaway says. IAG lowered its medium-term margin guidance to 15% from 15%-17%, so Citi cuts its EPS for FY 2023 and FY 2023 by 4% and 3% respectively. Even so, the investment bank reckons that IAG's overall prospects look reasonable and raises its target price 4.5% to A$5.85/share. IAG was last up 2.6% to A$5.23/share. (alice.uribe@wsj.com)

2236 GMT - Did CSL miss a trick as the world navigated the Covid-19 pandemic? Jefferies analyst David Stanton appears to think so. "We wonder whether CSL could have been more aggressive on price during and after Covid," he says of the company's Behring unit. "Industry feedback continues to be that CSL has not taken price to the same degree as competitors." CSL's plasma collections in the U.S. are now 10% above pre-Covid levels, putting the company on track for immunoglobulin and albumin volume growth in FY 2024. But the company is facing cost pressures, such as higher donor fees and a slower rollout of the new higher yield Rika device. (david.winning@wsj.com; @dwinningWSJ)

2235 GMT - IAG's update at its 2023 investor briefing was generally positive, signaling the potential for claims inflation to moderate, with premium increases still to flow through to margins into FY 2024 and beyond, Jefferies analysts say in a note. Still, they point out that reinsurance costs are likely to keep rising, with July 1 renewals remaining an unknown. While natural peril allowances are yet to be determined for FY 2024, Jefferies says El Nino could alter the pattern of repeated floods in North NSW and Queensland. The investment bank keeps its buy rating but raises its target price 5.4% to A$6.05/share. IAG was last up 2.6% to A$5.23/share. (alice.uribe@wsj.com)

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28 GMT - Jefferies downgrades CSL to hold from buy, after the Australian pharmaceutical company signaled that gross margins within its Behring unit won't return to pre-pandemic levels for 3-5 years. CSL yesterday forecast a FY 2024 net profit of $2.88 billion-$3.01 billion after stripping out the impact of currency swings, with Jefferies anticipating $2.91 billion. "We previously assumed Behring would return to pre-Covid by FY 2025," analyst David Stanton says in a note. CSL should deliver mid-teens earnings growth in FY 2024 and FY 2025, Jefferies says. But at a forward-year price-to-earnings multiple of 33 times, "we believe this is in the price," the bank says. (david.winning@wsj.com; @dwinningWSJ)

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