0452 GMT - Suncorp Group appears to be in a favorable position to sustain its robust profitability despite rising losses from natural catastrophes and higher reinsurance costs, says S&P Global Ratings in a note. The company continues to make progress in protecting its core insurance business amid evolving industry dynamics, it says. For FY 2023, S&P notes that Suncorp reported a strong turnaround in earnings, with a net income of A$1.15 billion, up about 69% on the prior year. "The improved result reflects higher premiums and a rebound in investment returns that collectively outweighed some large catastrophe claims," S&P says. "We view investments in technology and a refined underwriting appetite as supportive of future earnings resilience."(alice.uribe@wsj.com)

0442 GMT - Competition in the Australian deposit market will likely continue as lenders attempt to offset funding pressures, CBA CEO Matt Comyn says, adding that the lender isn't prepared to cede market share "just for the sake of it." Speaking to analysts after CBA issued its FY 2023 results, Comyn says that "clearly, a number of our competitors feel we are going to have to compete pretty aggressively for deposits." On mortgages, Comyn says CBA doesn't tend to compete in refinancing, which he deems as "still extremely aggressively priced." "The majority of that would be going to a very small number of banks that still have a cashback offer," Comyn says, noting that CBA wants to make sure there is sustainable margin profitability on mortgages. (alice.uribe@wsj.com)

0354 GMT - The reinsurance market could be moving toward the end of a structural reset that has seen insurers paying more for cover, says Suncorp CEO Steve Johnston. Speaking to analysts after issuing the insurer's FY 2023 results, he said he is hopeful the structural change is "done," and companies can move back into often more predictable cyclical reviews with reinsurers. "We look at the reinsurer's profitability loss ratios in reverse….and we're probably getting to a point where we feel like some of the structural adjustments have been made," Johnston said. Still, he thinks this may take a little bit more time to work through, as Australia and New Zealand are leveraged to what is happening globally.(alice.uribe@wsj.com)

0201 GMT - Inflation remains a key risk for Suncorp's businesses, despite issuing a very strong FY 2023 result, Moody's Investors Service says in a note. It sees the potential for increasing claims costs in the insurance business, with a possible link to higher loan arrears in the banking business. But Moody's reckons that at "this stage, these risks appear to be well managed." For FY 2023, Moody's says that Suncorp's Australian insurance business continues to perform solidly, with premium growth of 10.6% and a combined operating ratio of 92.7%, while in banking operations, home lending grew 9.1%. Moody's also notes that at the bank, non-performing loans remained low--around 0.64%. (alice.uribe@wsj.com)

0200 GMT - CBA could come under earnings pressure in 2024, with competition limiting further margin gains, which the bank said had peaked in late 2022, Moody's Investors Service says in a note. At the same time, Moody's thinks that "inflationary pressures will make cost management difficult. The operating environment is also likely to weaken, leading to even higher credit impairment charges." For FY 2023, Moody's sees CBA's statutory profit of A$10.2 billion as credit positive, up 5% from FY 2022, supported by rising interest rates and solid loan growth. An impairment charge of 12 bps was higher than the prior year's but still below historical levels, Moody's adds. (alice.uribe@wsj.com)

0149 GMT - The sudden exit of Beach Energy CEO Morne Engelbrecht creates an opportunity for a strategic reset, Citi says. Engelbrecht was in charge when the company withdrew capex guidance for the second stage of its Waitsia natural-gas project in Western Australia. "We have also felt that the strategy was not particularly clear under CEO Engelbrecht," Citi says. "Indeed, we had questioned the raison d'etre of Beach in the context of our work on how oil and gas companies should allocate capital in the energy transition." Beach should consider returning free cash as dividends and on-market share buybacks, Citi says. This is because the bank doesn't believe Beach has the scale or capabilities to navigate the energy transition. Beach has named Brett Woods as its new CEO, although he won't join until February. (david.winning@wsj.com; @dwinningWSJ)

0114 GMT - Slowing consumer spending and moderating inflation prompt Bell Potter to lower its transaction revenue forecasts for Australia-listed payments company Smartpay. Analyst Hayden Nicholson lowers the forecasts by 4.5% for fiscal 2024, by 9.1% for fiscal 2025 and by 15% for fiscal 2026, reflecting the assumption that average revenue per payment unit will slow. Yet he tells client in a note that he sees an improved earnings outlook from fiscal 2025 amid lower variable costs, lower software capital expenditure and industry regulation on mobile-wallet transactions. Bell Potter trims the stock's target price 6.2% to A$1.97 and maintains a buy rating. Shares are flat at A$1.525. (stuart.condie@wsj.com)

0041 GMT - Bendigo & Adelaide Bank is likely to deliver a record FY 2023 result, UBS analyst John Storey says in a note. It forecasts that the Australian regional bank will deliver FY cash earnings of A$627 million, noting that UBS is roughly 5% ahead of Visible Alpha consensus for FY 2023, predominantly due to a more positive net interest margin view. UBS thinks 2H is likely to be the peak for earnings for now, with weaker-than-expected volume growth and a normalizing credit charge ahead. With Bendigo's 1H residential mortgage flows 32% lower, UBS sees that FY net loans are likely to be down around 2.7%? on the prior corresponding period. (alice.uribe@wsj.com)

0029 GMT - Mining giant BHP is expected to record weaker FY earnings on year when it reports Aug. 22 due to lower prices for commodities including iron ore and copper, Macquarie analysts say in a note. They project FY 2023 underlying Ebitda of US$28.2 billion, down 31% on year, and underlying profit of US$13.8 billion, down 35%. They tip a US$0.93/share final dividend--a 65% payout. The analysts say their headline projections are mostly in line with consensus averages, although highlight a wide range of free cash-flow forecasts by the market. "The consensus for free cash flow is wide with a range between US$1.4 billion and US$6.4 billion," which likely "reflects varying views from analysts on BHP's working capital position and differences in capex estimates." (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0027 GMT - While Suncorp's cash net profit after tax was in line with consensus, there was wide dispersion by segment, UBS analyst Scott Russell says in a note. While its Australia unit was ahead of consensus and UBS estimates, New Zealand and its bank unit were both behind. "NZ? profitability appears weak but part of this miss appears due to reinsurance," says UBS. The investment bank adds that Suncorp's dividend was soft, and its excess capital position appears to have tightened up with the latest reinsurance program. (alice.uribe@wsj.com)

0024 GMT - CBA's FY 2023 results look clean, with a better-than-expected dividend, UBS analyst John Storey says in a note. The announcement of plans for a A$1 billion buyback is also a positive surprise. The investment bank says CBA delivered a 70bp beat on cash net profit after tax, while operating expenses excluding one-offs were largely in line with Visible Alpha consensus. "Credit trends and asset quality across the bank and its divisions still look healthy," says UBS. It has a neutral call on the stock with a A$100 target price. CBA rises 1.6% to A$103.77. (alice.uribe@wsj.com)

0022 GMT - It was perhaps disappointing that Woodside could only sell a 10% stake in its Scarborough natural-gas project after several years of trying, Morgans analyst Adrian Prendergast says in a note. The US$880 million transaction with LNG Japan, comprising Sumitomo and Sojitz, only marginally improves Woodside's upstream risk exposure in the project as it will still own 90% of equity in Scarborough, Morgans says. "Although we do expect the deal consideration will increase the prospect that Woodside maintains its dividend above its dividend policy longer than previously expected," Morgans says. "We now believe the company will keep its dividend flexed in its 1H result." Woodside is due to report earnings Aug. 22. (david.winning@wsj.com; @dwinningWSJ)

0016 GMT - Charter Hall Long WALE REIT needs to consider asset sales, Ord Minnett says. The property owner's look-through gearing rose to 40.1% at the end of June, from 37.3% at the end of December. The increase was driven by valuation losses across its investment portfolio. "While gearing remains within debt covenants (i.e less than 50%), we believe further valuation losses in FY 2024 will put pressure on gearing," analyst Leanne Truong says in a note. "As such, we expect Charter Hall Long WALE REIT to make divestments in FY 2024 to maintain current gearing levels." (david.winning@wsj.com; @dwinningWSJ)

0008 GMT - CBA's FY 2023 result is slightly better than Barrenjoey's expectations, the investment bank's analysts Jon Mott and Minh Pham say in a note. They call out the fact that CBA's net interest margin was trending down but not at the rate they were expecting in 4Q. Operating expenses were highlighted as a disappointment by Barrenjoey. Still, Barrenjoey sees that a strong dividend and A$1 billion buyback plan announcement should support the share price today. The stock is up 2.5% to A$104.77. (alice.uribe@wsj.com)

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0008 GMT - Suncorp's FY 2023 results were broadly in line with Citi estimates and consensus, analysts say in a note, but the dividend, which was toward the bottom end of the target 60%-80% payout range, will likely disappoint the market, Citi adds. It reckons that the payout likely reflects the significant drain on capital as a result of the FY 2024 reinsurance renewal, as well as the delay in the sale of Suncorp's bank unit to ANZ. At the same time guidance, while largely as expected, suggests a relatively tough 1H FY 2024, with motor inflation issues lingering as Citi had expected. "We would not be surprised to see the stock trade flat to down today," says Citi. (alice.uribe@wsj.com)

2357 GMT - Myer's profit warning is seen by Goldman Sachs analysts as supporting their view that Premier Investments' gross margin is heading back toward pre-Covid levels. Premier has a 26% stake in the department-store chain. GS reckons that the diversified retailer will offer higher discounts in response to stagnating top-line growth and offset deflation in cost-of-goods-sold. They also reckon that Premier Investments' earnings margins will drop to 16.4% in fiscal 2024 from 23.7% in fiscal 2022, compared with 12.8% prior to the pandemic, as lease and wage expenses rise as percentage of sales. GS prefers Super Retail in the discretionary retail space. It has a sell rating and A$19.30 target price on Premier, which is at A$21.44 ahead of the open. (stuart.condie@wsj.com)

2349 GMT - CBA's FY 2023 result is solid and is likely to be well received by the market, partly due to the announcement of plans for a new buyback, Citi analysts say in a note. In general, Citi sees that CBA made an effort to convey a message of strength and stability in its FY 2023 disclosures, with the investment bank expecting the supporting metrics to add to the stock's defensiveness in the current environment. "However, the market will be fixated on management's outlook commentary on exit net interest margin and costs," Citi says, referencing today's investor call. How CBA delivers on these will be crucial in driving consensus expectations, Citi reckons. CBA's FY 2023 cash earnings of A$10.16 billion were around 1%-2% ahead of consensus/Citi estimates.(alice.uribe@wsj.com)

2334 GMT - Lovisa still warrants caution despite the stock trading at a discount to its pre-Covid sales multiple, Macquarie analysts write in a note. They cut their recommendation on the jewelry company to neutral from outperform, telling clients that weakening consumer sentiment at home and overseas will pressure sales into fiscal 2024. They lower their EPS forecasts for the company by 8.9% for fiscal 2023 and by 12% for fiscal 2024. They observe that the stock is trading at 19X two-year forward earnings, compared with 24X prior to the pandemic, but remain cautious in the short term. They cut the target price 38% to A$22.00. Shares are at A$21.18 ahead of the open. (stuart.condie@wsj.com)

2254 GMT - James Hardie's earnings momentum can continue through FY 2024, says Jefferies, upgrading the building materials supplier to hold from underperform. "Consensus upgrades are expected to be material following the 1Q result and the commentary on the outlook," analyst Simon Thackray says. Jefferies raises its EPS forecast by 8% in FY 2024, 5% in FY 2025 and 3% in FY 2026. Management has signaled it will increase exposure in North America to new housing construction to not dilute Ebit margins there. "This revelation will no doubt be new to many but something likely to be taken at face value for some time by investors already enamoured by the quality James Hardie growth story," Jefferies says. "It may not be immediately clear why this Ebit equivalence in end markets was not disclosed earlier, but we suspect that will not matter unless earnings momentum was to falter." (david.winning@wsj.com; @dwinningWSJ)

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