401 GMT - Westpac's 3Q FY 2023 trading update shows unexpectedly high cost growth, which prompts Morgans to downgrade its forecasts, the broker's analyst Nathan Lead says in a note. He says that costs ex notable items for 2H to date are up around 5% versus 1H. "This was a negative surprise, with expectations, both ours and consensus, ofaround 1% growth for 2H," Morgans says, noting it wasn't too long ago that Westpac was targeting material cost declines. Morgans maintains its add rating, but cuts its target price 4.95% to A$23.02, mainly due to the cost growth, it says. Westpac falls 1.3% to A$20.89. (alice.uribe@wsj.com)

0234 GMT - Australian lenders mortgage insurance provider Helia is being impacted by the high refinancing in the country's banking sector which typically bypasses insurers, CEO Pauline Blight-Johnston tells analysts after the release of 1H results. But this will likely change, she says. "Over the long term, Australians need housing. We are expecting over 700,000 new immigrants to come into the country over the next two years, so at some point we don't expect that trend to continue forever but it's certainly a feature of the current environment," Blight-Johnston says. Helia's business may benefit once the lending mix moves back towards borrowers needing assistance with their deposits rather than serviceability, she adds. (alice.uribe@wsj.com)

0233 GMT - Australian lenders mortgage insurance company Helia may review its risk settings, as the impact of responsible lending on the country's banking sector continues, says CEO Pauline Blight-Johnston says on an analysts' call following the release of its 1H FY 2023 results. "We're watching that pretty closely...we need to set our risk settings to be appropriate for the environment in which we're operating," she says. "If we get through this period without seeing a material uplift in claims, then we think it's appropriate that we have a pretty good look at our risk settings and see if we should be taking more risk." Blight-Johnston notes that for 1H, new business is weaker than the company would like, and that it expects claims to increase into the future. (alice.uribe@wsj.com)

0221 GMT - Reliance Worldwide keeps its buy rating from Goldman Sachs despite a disappointing fiscal 2024 outlook. The GS analysts tell clients that the plumbing supplies provider's implied Ebitda guidance is about 6% weaker than they and the overall market had expected. They think that margin guidance likely reflects inventory reduction, but see the Australian company as well-positioned for continued strong cash generation. GS cuts the stock's target price 2.2% to A$4.40. Shares are down 5.5% at A$3.675. (stuart.condie@wsj.com)

0218 GMT - Southern Cross Media loses its buy rating from UBS analyst Lucy Huang, who doesn't see a recovery in metropolitan and regional ad markets recovering until fiscal 2025. Huang lowers her recommendation to neutral, citing short ad-market visibility and challenging macro conditions. She cuts her revenue forecasts for fiscal 2024 through fiscal 2026 by an average 7%, resulting in an average cut of 37% to her net profit expectations for the period. This includes an assumption that Southern Cross lowers its underlying costs by A$12 million-A$15 million by fiscal 2025, she adds in a note. UBS cuts the stock's target price 56% to A$0.74. Shares are down 0.6% at A$0.775. (stuart.condie@wsj.com)

0125 GMT - The heath of China's economy, which is being weighed by a drawn-out real estate crunch, is the main risk ahead for miner BHP, Jefferies analysts say in a note. "While the market may focus on capex and costs" from the miner's FY 2023 results, "the bigger concern is the risk of a worsening deflationary downturn in the Chinese housing market," the analysts say. That could lead to a sharp decline in China's commodity demand and push global markets into surplus, potentially driving prices deep into cost curves, say the analysts. "This is not our base case scenario, but the risk of this being the reality is rising," they say. BHP is down by 1.5% in Sydney at A$42.88/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0112 GMT - It's time to go shopping for a2 Milk, Morgans analyst Belinda Moore says. She raises her recommendation to add from hold and tells clients in a note that uncertainty surrounding the transition to U.K. product standards makes 1H FY 2024 the right time to buy the stock. She thinks that a2 Milk is well positioned over the medium term and should take further market share in China. Difficult market conditions persist but fiscal 2024 guidance looks conservative to Moore, who highlights strong strategy execution by management. The stock is trading at its lowest multiples for years, she adds. Morgans cuts target price 11% to A$5.40. Shares are up 3.6% at A$4.425. (stuart.condie@wsj.com)

0058 GMT - The scale of the slowdown in Seven West Media's on-demand ad revenue surprises Morgan Stanley analysts, who see the media conglomerate's outlook as cyclically and structurally challenged. A key debate is whether revenue from on-demand video broadcast can grow at a sufficient pace to offset declines from traditional TV, they say, adding that it appears unlikely given the slowdown in on-demand ad-market growth to 6% in FY 2023 from 47% in FY 2022. They tell clients in a note that on-demand doesn't have the scale to replace lower revenues across the traditional TV broadcast industry, and point to new competition from ad-subsidized services at Disney and Netflix. MS cuts target price 25% to A$0.30 and maintains an underperform rating on the stock, which is up 1.6% at A$0.325. (stuart.condie@wsj.com)

0056 GMT - While Nib's 2H FY 2023 result was a beat, Barrenjoey analysts say the full release of the remaining deferred claims liability and further customer refunds again distorted the underlying trends. The investment bank also says there is a known earnings headwind as the Australian Residents Health Insurance margin transitions back to an underlying level. "The timing of this remains unclear with management themselves having difficulty in drawing out true underlying claims trends," says Barrenjoey. It sees that the health insurer is trading at fair value, due to ongoing earnings volatility as the distortions of Covid-19 unwind. Nib falls 4.8% to A$7.96. (alice.uribe@wsj.com)

0053 GMT - While IAG delivered a slight 2H earnings miss, its FY 2024 guidance was largely in line with consensus expectations, Barrenjoey analysts say in a note. The investment bank cuts its FY 2024 cash earnings forecast by 5% on higher reinsurance costs and a lower insurance margin, with the exit rate being weaker than expected. Barrenjoey says IAG is trading largely in line with the ASX 200 on a 12-month forward P/E basis, which given the growth opportunity in coming periods could be viewed as value, but it sees "noise" in IAG's results, which reduces its confidence in the company's earnings trajectory, leading it to keep its neutral call on the stock. (alice.uribe@wsj.com)

0051 GMT - BHP's higher capex forecasts and weaker medium-term expectations for Escondida are likely to act as a drag on the miner's stock this session, RBC Capital Markets analysts Tyler Broda and Kaan Peker say in a note. "This will likely also serve to compress consensus free cash flow expectations at a time with risk to its still-main profit generator iron ore," say the analysts. The miner's growing capex and premium rating--of 7.0x FY 2024 estimated EV/Ebitda--means RBC prefers other global miners. Although, "within the Australian universe, we think BHP continues to screen well and remains a key pick," the analysts say. BHP is down 0.7% in Sydney at A$43.20/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0041 GMT - Engineering contractor Perenti's track record of providing conservative earnings guidance leads Jefferies to speculate that another beat could be on the cards in FY 2024. Perenti has signaled annual revenue of A$2.8 billion-A$3.0 billion, compared with A$2.88 billion achieved in FY 2023. The company also points to Ebita of A$260 million-A$275 million, which Jefferies says is in line with FY 2023. "If management are continuing their strategy of guiding conservatively, we expect upside risk to these forecasts as the year progresses," analyst Nicholas Rawlinson says in a note. Jefferies has a buy call on Perenti, which is down nearly 11% at A$1.08.(david.winning@wsj.com; @dwinningWSJ)

0035 GMT - Altium's decision to increase R&D spending makes strategic and financial sense to Morgan Stanley analysts, who maintain an overweight rating on the stock. They reckon that the Australian printed-circuit-board software provider's focus on small- and medium-size enterprises gives it a near-term competitive advantage over peers, but that the investment is sensible given risks from competitors with larger capital budgets. Its FY 2024 revenue guidance is comfortably ahead of market expectations and that of global peers, they add. MS raises the target price by 15% to A$50.00. Shares are up 22% at A$44.99. (stuart.condie@wsj.com)

0030 GMT - Supermarket operator Coles' annual result disappoints Jefferies, which highlights various challenges to its earnings in FY 2024. Coles reported FY 2023 EBIT from continuing operations of A$1.86 billion, missing Jefferies's forecast by 4%. "Sales trends are better than expected, and modest volume growth has persisted into FY 2024," analyst Michael Simotas says in a note. "But underlying cost growth, theft, reduced property earnings and further project implementation costs will remain earnings headwinds." The stock is down 5.8% at A$16.24. (david.winning@wsj.com; @dwinningWSJ)

(MORE TO FOLLOW) Dow Jones Newswires

0024 GMT - Mall owner Scentre is likely to hit the mid-to-top end of its guidance for annual funds from operations per security of between 20.75 Australian cents and 21.25 Australian cents, says Jefferies. That's despite higher debt costs of 5.6% in FY 2023, compared with 4.8% in FY 2022, analyst Sholto Maconochie says in a note. Higher debt costs are offsetting strong CPI tailwinds as Scentre's contracts typically allow it to raise rents by CPI +2% annually. Jefferies highlights specialty rents escalated by an average of +6.8% in FY 2022, and this is set to increase materially in FY 2023. (david.winning@wsj.com; @dwinningWSJ)

0020 GMT - BHP's fiscal 2023 profit and dividend have come in a tad below consensus expectations, and net debt higher, Citi analysts say in a note. Overall, the analysts have a "neutral view on results, but cost guidance for FY24 shows cost pressures still evident." Citi has a neutral rating and A$45.00/share target on BHP, which is 0.7% lower in Sydney at A$43.21/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0013 GMT - Westpac's 3Q update shows a weaker-than-expected expense performance, Goldman Sachs analysts Andrew Lyons and John Li say in a note. This was driven by inflationary pressures such as higher supplier costs, wages and salaries, and investment in Westpac's technology and customer simplification agenda, they say. "Westpac remains committed to cost discipline noting recent cost reset actions have driven a reduction in employee numbers of around 2% so far in 2H FY 2023," GS notes. It maintains its neutral call on the stock partly due to the fact that Westpac's core net interest margin continues to fall. (alice.uribe@wsj.com)

2317 GMT - AUD/USD is a little higher from where it ended Asia trading on Monday, hovering around 0.6400, but a downtrend seems likely to mark the currency's run toward the end of the year, says Kristina Clifton, currency strategist at CBA. CBA expects the extended weakness in China's property sector and elsewhere will remain a weight on Australian commodity prices and AUD for now. Clifton says there is a growing risk AUD/USD dips below 0.6000 before year-end. It will likely take a big Chinese stimulus package focused on commodity-intensive infrastructure spending to turn around the downtrend in AUD/USD, she adds. (james.glynn@wsj.com)

2251 GMT - IAG's rate increases remain very strong across both home and motor, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note looking at the company's FY 2023 results. This, they say, is a similar message to rival Australian insurer Suncorp, and a continuation of the strong rate update provided by IAG at its Investor Day. GS keeps its neutral rating on IAG, and makes small earnings changes, and say they are slightly above the midpoint of IAG's FY 2024 insurance profit guidance. GS also keeps its A$5.87 target price unchanged. IAG was last down 0.9% to A$5.79. (alice.uribe@wsj.com)

2244 GMT - Nib is showing strong growth and recovery in its non-Australian Residents Health Insurance businesses, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. This growth is seen particularly in its Travel and International Inbound Health Insurance businesses. GS also calls out market share gains in ARHI, with buffers built across ARHI expenses, investments, write downs and provisioning that can be unwound to support underlying operating profit growth over time. GS keeps its buy rating on Nib. (alice.uribe@wsj.com)

2235 GMT - IAG's 2H FY 2023 momentum bodes well for FY 2024, say Jefferies analysts in a note. Supporting this view, it says, is the fact that the insurer's FY 2023 insurance profit result was 29% higher in 2H versus 1H. Even so, Jefferies expects claims inflation to be an ongoing issue for IAG. "Whilst IAG has seen a moderation in claims inflation in 2H FY 2023, motor classes continued to be impacted by supply chain pressures resulting in high single-digit inflation," says Jefferies adding that IAG calls out claims inflation related to home insurance policies has increased since December 2022. Jefferies cuts its rating to hold from buy. (alice.uribe@wsj.com)

2204 GMT - Altium's strong new license sales and revenue guidance could help the stock outperform over the near term, Citi analyst Siraj Ahmed says. Ahmed tells clients in a note that the Australian printed-circuitboard software provider's fiscal 2023 performance was in-line with market expectations, but that the stronger-than-anticipated revenue outlook could be seized upon by bulls. The midpoint of Altium's fiscal 2024 revenue guidance range is about 7% ahead of market expectations, he says. Ebitda guidance is only 1% ahead of expectations, indicating that top-line growth is coming from design software and acceleration in new licenses. Citi has a last-published neutral rating and A$39.30 target price on the stock, which was at A$36.88 ahead of the open. (stuart.condie@wsj.com)

2200 GMT - Altium gets a new bull at Jefferies in anticipation of improved momentum in subscriber growth and direct monetization of its cloud-based design platform. Analyst Roger Samuel raises his recommendation to buy from hold, and reckons that the Australian software provider's valuation looks undemanding compared with larger local peers Wisetech and Xero. He likes the improvement in subscriber growth seen in 2H fiscal 2023 and expects further improvement across the next two fiscal years. A 19% rise in average revenue per user across the whole of fiscal 2023 shows users also taking up premium products, he adds. Jefferies raises target price on the stock 6.2% to A$44.69. Shares were at A$36.88 ahead of the open. (stuart.condie@wsj.com)

0624 GMT - IAG should see earnings tailwinds, including higher investment earnings, remain supportive into FY 2024, says S&P Global Ratings in a note. "Earnings resilience also derives support from the insurer's well-structured reinsurance program. The insurer has renewed substantial whole-of-account quota-share arrangements with long terms of five to seven years," says S&P. At the same time, it reckons that solid increases in premium rates continuing into 2024 will continue to offset ongoing claims inflation and natural peril costs, pointing out that capital adequacy remains a credit strength for IAG. (alice.uribe@wsj.com)

0549 GMT - Claims inflation at IAG, non-perils and non-reinsurance could ease across Australia and New Zealand, Chief Executive Nick Hawkins tells analysts after the insurer's FY 2023 results. But Hawkins says he thinks differently about perils and reinsurance as these challenges don't go away. "I don't see that topic on average, over multiple years going away...in fact, I see the opposite, where increased frequency and severity of these large events can be a theme for countries going forward," he says. For this reason, investing in the mitigation and resilience of Australia and NZ remains very important, he adds. (alice.uribe@wsj.com)

0537 GMT - IAG's move to raise premiums amid inflationary costs, weather volatility and more expensive reinsurance sets the insurer up for a good gross written premium in FY 2024, says CFO Michelle McPherson. Speaking after FY 2023 results, she says strong rate increases stepped up from 1H to 2H, and those will start to earn through soon. IAG CEO Nick Hawkins also expects the company's 2H margin in FY 2024 to be better than 1H. He notes IAG is mindful of higher rates' impact on households managing tighter budgets. "We have been disciplined...to how we're managing costs of running IAG," he says. "What that's done is really help limit some of those premium increases we were passing onto our customers." (alice.uribe@wsj.com)

0454 GMT - Construction delays at Coles's two new automated fulfillment centers will likely cost the Australian supermarket operator about A$200 million in Ebit, Goldman Sachs analysts say. They tell clients in a note that the impact includes implementation operating expenses and depreciation over three years through FY 2025. The impact isn't material but does raise questions about the management's execution capability, they say. GS reiterates a sell rating on Coles, highlighting the importance of omnichannel competitiveness to supermarket operators seeking to gain market share and scalability. GS has a A$16.70 target price on the stock, which is down 0.55% at A$17.205. (stuart.condie@wsj.com)

0449 GMT - Westpac's 3Q trading update looked a bit soft, UBS analyst John Storey says in a note. Even so, he says that the Australian lender's run rating seems to be relatively in line with Visible Alpha consensus for the full year. Regarding operating trends, UBS reckons these are in line with what it has witnessed from other lenders, but it calls out Westpac's core net interest margin, which was down 4 bps versus 1H, slightly worse than peers. Revenue trends seem somewhat stronger than expected, UBS says, adding that Westpac's 3Q unaudited reported net profit of A$1.8 billion suggests it will need to deliver another quarter of earnings similar to 3Q to deliver full-year consensus forecasts. UBS is neutral on the stock. (alice.uribe@wsj.com)

(END) Dow Jones Newswires