0432 GMT - Macquarie may be factoring in margin over volume in its banking unit, which has recently experienced a slow down in home loans, says Morningstar analyst Nathan Zaia. He tells Dow Jones Newswires, ahead of the Australian financial company's AGM this week, that it will be "interesting to hear if management's strategy has changed." Morningstar will also be looking for an update on Macquarie's commodities and global markets unit, which got a boost from heightened volatility, but could now show a material decline from last year. "The real test is how much of a fall in activity can now be offset by new client wins, expanding in more regions, and adding products," says Zaia, adding that Macquarie may give an update short-term guidance this week. (alice.uribe@wsj.com)

0138 GMT - QBE's rate increases continue to be very strong and ahead of original expectations for FY 2023, Goldman Sachs analysts Julian Braganza and Brian Kim say in a note. This should theoretically offset much of the pressure into FY 2024 on allowances and reinsurance, they say. At the same time, they see that QBE's investment income also continues to be very strong, with a running yield of 4.9% as of end-June. GS keeps a buy rating on the stock, liking the insurer's strong topline gross written premium growth and continued rate increases, which should benefit it throughout FY 2023-2024. (alice.uribe@wsj.com)

Operationally, South32 enjoyed a strong 4Q, with the production of all core commodities except alumina in line with or beating expectations, RBC Capital Markets analyst Kaan Peker says in a note. But the miner expects to record a US$1.3 billion impairment at Hermosa and also flagged a higher-than-anticipated depreciation charge, Peker says. South32 shares in Sydney are down 2.0% at A$3.745/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0131 GMT - As a high-inflation environment makes costs a key differentiator for Aussie banks, Goldman Sachs analysts say they are keen for an update on how regional lender Bendigo & Adelaide is managing the pressure. Ahead of Bendigo's 2023 results, GS notes that the bank had previously reiterated a medium-term goal of keeping costs broadly flat on year. GS says it will be interested in what levers Bendigo has used or can use to offset inflation, and its outlook for attaining greater productivity benefits. GS has a final 2H dividend forecast of 31 Australian cents for Bendigo, which it says is in line with Visible Alpha consensus figures. (alice.uribe@wsj.com)

0104 GMT - Bendigo's year-to-date share-price performance has been very disappointing despite the Australian regional lender registering a solid beat at its 1H result, say Citi analysts in a note. Ahead of Bendigo's FY 2023 results, Citi says it views consensus expectations as too low and investor expectations may be even lower given weak share-price performance. The investment bank's analysis finds that Bendigo management is managing net interest margin over balance sheet growth, with consensus also possibly too conservative on asset quality. Citi reckons that potentially more resilient NIM and more modest bad and doubtful debt expense could unwind the recent underperformance, and keeps its buy call on the stock. (alice.uribe@wsj.com)

0036 GMT - If ANZ's acquisition of Suncorp's bank gets regulatory approval, then the lender is unlikely to announce any more buybacks, Morgan Stanley analysts say in a note. But if the transaction doesn't get the green light, MS reckons ANZ could ultimately undertake a buyback of over A$4 billion and still consider small bolt-on acquisitions. The investment bank forecasts ANZ's final dividend at A$0.81, which MS says is in line with the interim dividend and above the 2019 level of A$0.80 per half. This also implies a full-year payout ratio of around 69%, MS adds. (alice.uribe@wsj.com)

0026 GMT - Westpac is unlikely to launch a buyback until 2024, say Morgan Stanley analysts in a note. This is despite the lender having said it may consider a buyback at the FY 2023 result in November, MS notes. The investment bank forecasts a final dividend of 70 Australian cents, in line with the interim dividend but still below the final 2019 dividend of 80 Australian cents and the pre-Covid peak of 94 Australian cents. The full year dividend of A$1.40 equates to a payout ratio of 69% ex notable items, says MS. (alice.uribe@wsj.com)

2350 GMT - NAB is likely to keep its buyback pause in place after stating it would do so at its 1H FY 2023 results, say Macquarie analysts in a note. They reckon the pause will stay in place at the 3Q FY 2023 trading update in August, but expect the lender to announce an A$2 billion buyback at the FY 2023 result. This will reduce the proforma ex-dividend CET1 ratio by around 46 basis points to around 11.2% from around 11.6%, Macquarie says. It forecasts a final dividend of A$0.83, in line with the interim dividend and 2019, adding that this implies a 2H FY 2023 payout ratio of around 79% but a full-year ratio of around 71%. (alice.uribe@wsj.com)

2345 GMT - Atlas Arteria's 2Q performance was mixed relative to expectations at Morgans, where analysts see a potential takeover as the biggest factor likely to move the toll-road operator's shares. Analyst Nathan Lead maintains a hold rating with a A$6.43 target price that includes 60% of the A$1.00 premium attached to a potential takeover by IFM, which has built a 22% stake. Lead says in a note that solid growth at Atlas Arteria's 31%-owned APRR road was broadly in line with his expectations, while Chicago Skyway traffic was less weak than he had assumed. He remains disappointed by Dulles Greenway and cannot muster confidence in its outlook. Shares were at A$6.21 ahead of the open. (stuart.condie@wsj.com)

2333 GMT - MS names Aussie property stocks that could guide to declining EPS and funds from operations in FY 2024. In a note, the bank says earnings of Mirvac, Charter Hall, and Centuria Office REIT could be restrained by headwinds including interest expense, asset sales, and departing tenants. "At present, consensus has Mirvac's EPS flat at circa 14.7 cents for FY24, but we're at 14.3 cents and whilst Mirvac is our top pick in the sector, we would admit that there is downside risk to earnings revisions, albeit only over the next month," MS says. Meanwhile, it's expecting Charter Hall to deliver 78.1 cents FFO guidance for FY 2024, below consensus forecasts for 79.8 cents. "As we head into a year of redemptions, revaluations, and slow deal flows, the initial guidance from Charter Hall could be subdued," MS says. (david.winning@wsj.com; @dwinningWSJ)

2326 GMT - Aristocrat Leisure's acquisition of NeoGames and its so-called iGaming technology gives the Australian company options for tapping the fast-growing U.S. online gaming market, Macquarie analysts say. They tell clients in a note that they see North American iGaming revenues growing from US$8 billion in 2023 to US$28 billion in 2030, with legislative progress supporting expansion. They reckon Aristocrat could charge a fee of 5% or more to operators who need third-party account-management and aggregation services. The analysts maintain their high conviction on Aristocrat. Macquarie keeps an outperform rating and A$46.50 target price on the stock, which was at A$38.37 ahead of the open. (stuart.condie@wsj.com)

2324 GMT - CBA's capital management considerations haven't changed much from February, say Macquarie analysts in a note. They reckon the lender's healthy provision level means it can announce another A$1 billion on-market share buyback, which the investment bank estimates would use only around 21 basis points of capital. Macquarie has a final dividend forecast of A$2.35/share versus the previous peak of A$2.31 in 2H of FY 2019. This, the investment bank adds, would see a full-year payout ratio of around 73%, or around 74% assuming 'normalized' loan losses. (alice.uribe@wsj.com)

2322 GMT - The key issue for Australian reits heading into next month's reporting season is earnings stability, says Morgan Stanley. "Traditionally, reits are a group of stocks that offer predictability on a multi-year view, but that has changed somewhat in the current environment due to macro issues (e.g. rates, pace of resi sales), asset recycling, capex commitments, and pipeline evolution," MS says. So, stocks perceived to have a steady outlook could command a premium, at least in the short term, the bank says. "Admittedly asset valuations remain an important matter, but updates from the likes of Dexus, Centuria funds, and Charter Hall funds in the last month has somewhat de-mystified things for this reporting season," MS adds. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

July 24, 2023 01:16 ET (05:16 GMT)