0250 GMT - South32 loses a bull in Goldman Sachs due to soft prices, production and increased costs. "S32's June [quarter] result was much improved post the five or so negative one-off events in the March [quarter], but was still weaker than expected with lower alumina and zinc production and lower June [half] realized commodity prices" versus the bank's estimates, with the exception of alumina, GS analysts say in a note. They are also disappointed by increased costs at the Hermosa project, saying there was "no indication of a total project capex increase" on a recent site visit. They downgrade the stock to neutral from buy and cut their target to A$3.70 from A$4.10. South32 is up 3.9% in Sydney at A$3.865, recovering from Monday's 2.6% fall amid a rally in mining stocks. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0144 GMT - Newcrest's 4Q result was disappointing, with costs well above expectations and gold output a tad below, RBC Capital Markets analyst Alex Barkley says in a note. "Another weak quarter at Lihir saw the site miss annual guidance again" due to "issues of mining flexibility paired with insufficient autoclave capacity," Barkley says. The miner also grappled with environmental issues at Cadia, and Barkley reckons issues at both Lihir and Cadia could linger in FY 2024. Newcrest is down 0.4% at A$26.38/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0036 GMT - Altium's increased headcount will likely curb any fiscal 2024 margin expansion at the Australian software provider, Goldman Sachs analyst Kane Hannan says. He tells clients in a note that LinkedIn data shows 18% growth in employees at Altium over the past 12 months, which is consistent with management commentary at its 1H fiscal 2023 results. Altium's staff costs represent about 70% of its cost base, he says. GS lowers its Ebitda forecasts for FY 2024, FY 2025 and FY 2026 by 1%, 3% and 4% on investment and softer demand. GS trims the stock's target price 2% to A$41.00 and maintains a neutral rating. Shares are up by less than 0.1% at A$36.83. (stuart.condie@wsj.com)

0009 GMT - REA shares are already priced for a recovery in Australian property listings volumes, Jefferies analysts say. With momentum improving in the large metropolitan markets of Sydney and Melbourne, the Jefferies analysts reckon that REA can boost volumes by 3% in 1H FY 2024 and by 8% in 2H FY 2024. They say in a note to clients that the recovery in listings in Sydney and Melbourne could also kick off a rise elsewhere as an increase in properties to buy gives homeowners more confidence to sell their properties. That said, REA shares are already 34% higher so far in 2023. Jefferies raises the stock's target price 12% to A$146.92 and maintains a hold rating. Shares at A$148.28 ahead of the open. REA is 61% owned by News Corp., which also owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

2358 GMT - Domain's skew toward the large Sydney and Melbourne property markets prompts Jefferies analysts to upgrade their recommendation on the real-estate advertiser to buy from hold. They point out that Domain outperformed rival REA in terms of valuation multiple and revenue growth during an upturn in listings that ran through 2H FY 2022. Sydney and Melbourne listings momentum is now improving and Domain could again benefit, they say in a note to clients. Jefferies raises its target price on the stock 31% to A$4.38. Shares were at A$3.78 ahead of the open. REA is 61% owned by News Corp., which also owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

2332 GMT - The number of uncertainties surrounding Core Lithium's Finniss project keeps Citi analysts sell-rated on the stock despite their confidence in the miner's balance sheet. They tell clients in a note that there are simply too many moving parts for them to feel more positive toward the ASX-listed company. They point to factors including capital expenditure levels and the cost of future ore sources. Citi lowers its FY 2024 and FY 2025 production forecasts by 38% and 63%, respectively, and sees costs remaining elevated until FY 2027. It cuts its target price 38% to A$0.50 and maintains a sell rating on the stock, which was at A$0.72 ahead of the open. (stuart.condie@wsj.com)

2328 GMT - Toll road owner Transurban's dividend guidance will be a key focus of investors at its FY 2023 result, along with any clues around who will next lead the company, RBC Capital Markets says. "We currently estimate modest distribution growth of 2.9% versus FY 2023 to A$0.60/share," RBC says. "We will also be looking for any commentary on the composition of this guidance as it relates to operating cash flows versus capital releases." Transurban CEO Scott Charlton has announced plans to step down, and RBC says investors will be expecting an announcement or update on his replacement as well. RBC rates Transurban at sector perform. (david.winning@wsj.com)

2324 GMT - Sonic Healthcare could have as much as A$2.5 billion for more acquisitions, says Macquarie. That estimate assumes Sonic ends FY 2024 with net debt-to-Ebitda of 1.2 times, well below a gearing target of 2.5 times. "Assuming an Ebitda multiple of 12x, we estimate that every A$500 million would provide EPS accretion of 1% (pre-synergies)," says Macquarie, which rates Sonic at underperform. Macquarie lifts its price target 4.5%, to A$33.50/share. Sonic ended Monday at A$35.50. (david.winning@wsj.com; @dwinningWSJ)

2322 GMT - Core Lithium's Finniss project won't reach full production until fiscal 2027, Macquarie analysts say. They tell clients in a note that they are pushing back their forecast by two years after Core Lithium's fiscal 2025 production guidance fell materially short of their expectations. They have slowed their ramp-up assumptions as a result, reducing their cumulative spodumene-output forecast by about 30% over the four years through fiscal 2028. Macquarie cuts target price 25%, to A$0.90, but maintains an outperform rating on the stock, which was at A$0.72 ahead of the open. (stuart.condie@wsj.com)

2320 GMT - Australian insurance brokers continue to benefit from premium growth with no underwriting risk exposure outside of small profit-share commissions, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. Ahead of upcoming FY 2023 results, GS expects brokers Steadfast and AUB may be seeing small organic growth, premium rates looking to be staying strong. "We still have a relative preference for AUB pivoted on opportunity for margin expansion likely driving better organic growth trends and relative valuation," says GS adding that both continue to have acquisitive-led growth abilities. It's buy rated on AUB, raising its target price 6.7%, to A$30.68/share, and is neutral rated on Steadfast, raising its target price 2.8%, to A$5.90/share. (alice.uribe@wsj.com)

2318 GMT - Jefferies stays cautious toward outdoor advertising group oOh!media ahead of its 1H result next month. In a note, analyst John Campbell says it is encouraging that May and June have been better for oOh!media, but 2H historically delivers 65% of earnings. "The macro environment for Media remains febrile," he says, highlighting the risk of a protracted consumer recession. "And oOh!media has an unusually high level of lease renewals in 2023/2024." Jefferies retains a hold call on oOh!media and a A$1.25/share price target. (david.winning@wsj.com; @dwinningWSJ)

2308 GMT - There's a high likelihood that Paine-Schwartz will make a binding bid for fruit-and-vegetable marketer Costa on current terms, says Jefferies, which lifts its price target on Costa by 31% to A$3.15/share. Paine-Schwartz is offering A$3.50/share to acquire Costa, valuing its equity at A$1.63 billion, and has one week remaining of a planned eight-week period of due diligence. Paine-Schwartz had previously bought a 14% interest in Costa in October last year. "We believe there are few if any regulatory issues to be cleared," Jefferies analyst John Campbell says in a note. "Given Paine-Schwartz has undertaken seven weeks due diligence already and knows the business well from previous ownership, we believe there's a high probability this will proceed to a binding bid on the current terms." (david.winning@wsj.com; @dwinningWSJ)

2258 GMT - Life360's 2Q is likely to show the impact of April's price rises for U.S. Android users, Bell Potter analyst Chris Savage says. He tells clients in a note that he expects a solid performance for the three months through June but for growth in so-called paying circles to be lower than in the prior quarter. The Australia-listed family safety app provider experienced a similar spike in customer churn when it pushed through price rises for U.S. iOS users in 2022, he notes. Savage adds that the churn means that Life360 probably won't upgrade its full-year guidance until at least after its 3Q result. Bell Potter lifts target price 2.8% to A$9.25 and maintains a buy rating on the stock, which was at A$7.82 ahead of the open. (stuart.condie@wsj.com)

2302 GMT - The positives outweigh the negatives for investors in lithium miner Pilbara Minerals, Jefferies says. Pilbara Minerals yesterday reported a 10% rise in on-quarter output and bolstered its net cash position to A$3.3 billion. Still, the company missed on pricing and delayed its P680 crushing facility by around six months to 4Q of FY 2024. "The bears will quite rightly point to an average realized price significantly below what prior commentary would imply is rational," analyst Mitch Ryan says in a note. "The bulls, including us, point to the ongoing strong cash build, improving production metrics and likely mine life extensions." (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

July 25, 2023 00:55 ET (04:55 GMT)