0458 GMT - KMD Brands' FY 2023 sales guidance was about A$50 million lower than UBS analysts Bianca Fledderus expected, likely because of weak Australian consumer sentiment. Fledderus is particularly disappointed by Ebitda guidance of A$105 million-A$110 million, which is 19% lower than her prior forecast at the mid-point. She calls out weak 4Q Australian consumer sentiment paired with lower Kathmandu-brand sales against the backdrop of a relatively warm June. UBS maintains a buy rating on the retailer but cuts its target price 26% to NZ$1.15. Shares are up 2.1% at NZ$0.97. (stuart.condie@wsj.com

0422 GMT - Reliance Worldwide faces revenue headwinds in the U.K. from softening housing-construction activity, Citi analysts say. They tell clients in a note that they have seen negative signals from three leading building-material distributors in the U.K. over the past three weeks, which doesn't bode well for the Australia-listed plumbing-supplies manufacturer. Soft construction activity contributes to their cautious outlook, they say. Citi trims the stock's target price 1.2% to A$4.05 and keeps a neutral call. Shares are up 0.25% at A$4.00. (stuart.condie@wsj.com)

0357 GMT - Macquarie's analysts lower their EPS forecasts for Incitec Pivot for each of the next three years on lower diammonium phosphate and ammonia price expectations. They cut their forecasts for FY 2023 by 12%, for FY 2024 by 11%, and for FY 2025 by 13%, which they tell clients in a note also reflects higher underlying cash costs for the fertilizer and explosives maker's Phosphate Hill plant. This is related to higher gas-sourcing costs and the increased cost of so-called fly-in, fly-out labor, the analysts say. Macquarie trims the target price by 3.2% to A$3.00 and stays neutral on the stock, which is down 1.7% at A$2.87. (stuart.condie@wsj.com)

0258 GMT - Netwealth may continue to see volatility in quarterly net flows, says E&P analyst Olivier Coulon in a note. The financial services firm says that the Australian platform operator continues to see elevated outflows, but the on-year decline in inflows appears to have stemmed in the June quarter. "While the company appears confident in its ability to continue to take meaningful market share, the commentary around the difficulty of estimating timing of transitions suggests that we should expect to continue to see volatility in quarterly net flows in the near future," says E&P. After several quarters of weaker flows, the stock should perform well today after its June quarterly business update. Netwealth rises 5.9% to A$14.55/share. (alice.uribe@wsj.com)

0244 GMT - Australia's competition regulator will likely approve ANZ's acquisition of Suncorp's bank when it hands down its decision on July 28, Morgan Stanley analysts say in a note. The analysts see two scenarios in its base case: an outright approval or a conditional approval. They don't expect the regulator to block the transaction, a move that could spur the companies to appeal to the Australian Competition Tribunal. If scenario one of outright approval is the outcome, MS expects the market to value Suncorp's bank at A$4.1 billion in net proceeds, which it thinks would add around 10% to Suncorp's stock price. Shares last around A$13.56. (alice.uribe@wsj.com)

0211 GMT - Netwealth's June quarter inflows met consensus expectations, but beat Wilsons', say the broker's analysts. They reckon this implies FY 2023 net inflows of A$9.75 billion, which compares with guidance of between A$9 billion-A$11 billion and consensus of A$9.8 billion. "We expect the market to consider the positive inflows encouraging although the significant quarter on quarter jump in outflows driven by the risk-off environment and relative attractiveness of term deposits to be the ongoing near-term focus," says Wilsons. It reckons that with 4Q also fast approaching, the annual tax period, it's likely the following quarters will see moderating outflows. (alice.uribe@wsj.com)

0114 GMT - Ramsay Health Care's divestment of its Asian joint venture could alleviate fears about the private-hospital operator's gearing but it still faces margin headwinds from increased digital and data spending, Citi analyst Mathieu Chevrier says. He reckons that the divestiture could raise A$675 million, which would be useful given that Ramsay expects digital and data spending to reach A$110 million-A$130 million by fiscal 2025. This represents a headwind to the Australia division's Ebit margin of more than 100 basis points, Chevrier adds. Citi cuts the stock's target price 12% to A$58.00 and maintains a neutral call. Shares are up 1.15% at A$56.40. (stuart.condie@wsj.com)

0037 GMT - New Zealand-based payments enabler Smartpay should lift both profit and margins as it expands its Australian customer base, Bell Potter analyst Hayden Nicholson says. He initiates coverage of the stock with a buy rating and tells clients in a note that each additional payments terminal deployed in Australia has a contribution margin to EBIT of almost 48%, compared with the a fiscal 2023 group EBIT margin of 11%. Bell Potter places a A$2.16 target price on the stock, which is up 3.5% at A$1.755. (stuart.condie@wsj.com)

0006 GMT - Incitec Pivot's spinoff of its fertilizers business may offer incremental valuation upside but there are risks given the weakness in urea and diammonium phosphate pricing, Citi analysts say. They tell clients in a note that the timing of any separation has likely slipped on pricing softness. They reckon that Incitec Pivot's fertilizers business is worth A$1.8 billion, or the equivalent of A$1.30 a share. With the explosives business worth A$1.80 a share, this offers slight upside to Citi's A$3.00 target price. Citi stays neutral on the stock, which was at A$2.92 ahead of the open. (stuart.condie@wsj.com)

0006 GMT - More mortgage holders and renters are feeling the pressure with inflation still "uncomfortably high," CBA CEO Matt Comyn tells an Australian parliamentary committee. Many households are cutting discretionary spending and using their savings, he says, noting that those with a mortgage are bearing the brunt of current monetary policy. "While the number of customers who are failing to make repayments is still low by historical standards, it is clear that many more are feeling under pressure," he says. Most borrowers, who bought their first home during the pandemic, have cut spending and a third have reduced it by more than 30%, he says. Still, the strong labor market, returning immigration and robust export sector, will help Australia manage the current economic environment, he adds. (alice.uribe@wsj.com)

2337 GMT - Megaport's recent share-price run leaves the Australian communications-tech provider looking fairly valued at about 7 times revenue, Citi analyst Siraj Ahmed says. He tells clients in a note that risk-reward doesn't look especially compelling given the possibility that Megaport will need to step up investment due to increased competition. Ahmed also sees execution risk around the operational turnaround, which is likely to play out across the 2024 calendar year. Citi raises its FY 2023 Ebitda forecast by 15% and its FY 2024 forecast by 3% following Megaport's improved guidance. It target price is raised 22% to A$9.05 but Citi cuts its recommendation to neutral from buy. The stock was at A$9.48 ahead of the open. (stuart.condie@wsj.com)

Pacific Smiles beat Wilsons' earnings expectations when it pre-released on Wednesday its FY 2023 revenue and underlying earnings before interest, taxes, depreciation, and amortization performance, says the broker in a note. "We assess an encouraging turnaround in profitability," says Wilsons, noting that cost restructuring likely matches what looks to be a new, and slower, post-pandemic norm for primary healthcare service providers. Wilsons reckons that FY 2024 is positioned as a performance, rather than growth, year and raises its target price 24% to A$1.55/share. Pacific Smiles closed Wednesday up 3.7% to A$1.42/share.

2251 GMT -- LendLease is likely to see strong earnings growth into the future, particularly given the company's weaker base in FY 2023, say Citi analysts in a note. Still, the investment bank sees a near-term risk for Lend Lease because of its reliance on development earnings amid asset value declines and rising construction costs. Even so, Citi says there is likely to be a pathway to more normalized earnings over the next two to three years, partly because of its potential stake sale in the communities and retirement businesses. While Citi acknowledges potential execution risks, the investment bank keeps its buy call, but cut its target 2.0% to A$9.80/share. LendLease was last down 0.4% to A$7.89/share. (alice.uribe@wsj.com)

0610 GMT - The situation where a mortgage holder, particularly in areas prone to natural events like flooding, lets insurance lapse due to cost, is a topic worthy of further investigation, says NAB. The lender's personal banking executive Rachel Slade tells an Australian parliamentary committee that climate change, living costs and insurance costs are a "potential emerging issue for our customers and our bank," and that NAB research shows a likely level of underinsurance in some flood-prone areas. Lenders require customers to have cover at settlement and while mortgages are generally 25 years, insurance contracts are taken out annually. "We need to…go back to what friction we put in the system," says NAB CEO Ross McEwan. "I think it is a good topic for the industry to work its way through."(alice.uribe@wsj.com)

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0525 GMT - Australian households are likely feel more pressure in the form of "one or two more moves by the Reserve Bank of Australia" on as it looks to manage inflation, NAB CEO Ross McEwan tells an Australian parliamentary committee. Commenting on interest rates, McEwan says: "It is my view that the sooner we get to the top of this cycle the better, because while it hurts, it is the uncertainty that is harder to manage through." Since interest rates started rising in May 2022, NAB has contacted over 500,000 customers to see how they are managing, McEwan says, adding that includes 8,600 home loan customers who may be at risk. "But after checking in with them, surprisingly only 14 wanted immediate help," McEwan says. (alice.uribe@wsj.com)

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July 13, 2023 01:01 ET (05:01 GMT)