333 GMT - Pepper Money's 1H FY 2023 result came in below expectations, missing consensus across all headline metrics, say RBC analysts in a note. They add that the weakness was driven by ongoing impact of rising rates, slowing demand and heightened competition in mortgage lending in Australia. At the same time, RBC notes that Pepper Money didn't provide guidance, although this is in line with previous years. Another negative, is that net interest margin is showing weaker trends, so there may be more challenges ahead for the company. (alice.uribe@wsj.com)
0314 GMT - Hub24's comments on its earnings outlook at its FY 2023 results announcement look incrementally positive, Morgans analysts Scott Murdoch and Jared Gelsomino say in a note. They note that the investment-platform provider's 1Q inflows commenced at a higher run rate versus 4Q. "We expect Hub24 to continue to entrench a market leading position, along with Netwealth,in the platform sector, which is a key attraction," Morgans says, adding that the runway to secure additional adviser market share remains material. Morgans sees long-term upside for the stock, but islooking for a market-led pullback for a more attractive entry point. It cuts its rating to hold from add, but raises its target price by 11% to A$32.80. Hub24 falls 0.7% to A$30.98. (alice.uribe@wsj.com)
0253 GMT - Mining giant BHP is pivoting to growth with a pipeline of options that are diversified both by commodity and investment horizon, say Macquarie analysts, who have an outperform rating and a A$47.00 target on the stock. Alongside its FY earnings, the company outlined timelines for studies to expand in iron ore, potash and copper. "As the group pivots to growth, we expect lower payout ratio in the short to medium term, with a payout ratio of [circa] 63% for FY24," the analysts say in a note. BHP is up 1.9% in Sydney at A$44.01. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0244 GMT - Long-term WiseTech investors are likely to be unshaken by the logistics-software provider's lower-than-expected FY 2024 guidance, E&P Financial analyst Paul Mason says. He tells clients in a note that selling is likely to be focused among recent investors. Looking past the guidance, Mason sees WiseTech's FY 2023 results announcement as a positive in terms of strategy execution. E&P has a last-published positive recommendation and a A$84.49 target price on WiseTech shares, which are down 20% at A$69.27. (stuart.condie@wsj.com)
0118 GMT - IAG looks to be tracking in the right direction from an operational perspective after a challenging few years, with earnings momentum likely to improve further into FY 2024, Morgans analyst Richard Coles says in a note. On the Australian insurer's FY 2023 results, Morgans reckons they were fundamentally as expected, with its 2H performance showing good improvement in underlying profitability and momentum going into FY 2024. The broker adds that it views the environment as broadly favorable for IAG, with strong premium rate increases continuing, but keeps a hold call on the stock on valuation grounds compared to sector peers. Morgans raises its target price 4.3% to A$6.26. IAG rises 7.5% to A$5.81. (alice.uribe@wsj.com)
0117 GMT - Worley's stronger FY 2024 outlook--including a bolstered Ebitda margin forecast of 7.5%-8.0%, versus an earlier estimate of circa 7.5%--helps to justify its investment case, say Citi analysts in a note. "This guidance appears to be on a proforma basis, which excludes the U.S. turnaround business to compare FY23 to FY24 on a like-for-like basis, implying management haven't 'cheated' to achieve growth in margin guidance by selling a lower margin business," the analysts say. The robust outlook should help Worley "grow into what some may perceive to be a high multiple at present," say the analysts, who have a buy rating and A$20.00 target on the stock. Worley is up 3.7% at A$18.03.(rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0105 GMT - PSC Insurance Group's FY 2023 result is overall in-line, UBS analysts say, noting that its Paragon unit's performance provided some comfort by improving in the 2H. At the same time, PSC's new online platform APEX is likely to drive efficiencies, they say in a note. The system, which currently hosts five products, appears to be a contestable platform across domestic and commercial classes, they add. UBS has a neutral call on the stock.(alice.uribe@wsj.com)
0047 GMT - Mall owner Scentre delivered another strong operational update but Macquarie wonders if the peak of the cycle is in sight. Occupancy was at 99.0% as of end-June and average re-leasing spreads improved to +2.6% in 1H. Still, Scentre signaled that sales growth moderated in the past 2 months, particularly for more discretionary categories such as fashion and homeware. "With 80% of specialty tenant rent escalations linked to CPI +2%, we believe re-leasing spreads will begin to moderate as growth in discretionary sales categories slows," Macquarie says in a note. "In our view, this could be a source of negative catalysts into the medium term as embedded retailer performance begins to unwind." (david.winning@wsj.com; @dwinningWSJ)
0047 GMT - WiseTech Global's annual underlying profit was slightly weaker than anticipated by Citi analysts. They say that it is hard to judge where the result sits in relation to market expectations for the logistics software provider given the impact of integrating recent acquisitions but point out that recurring revenue growth was slower than anticipated. They tell clients in a note that FY 2024 margin guidance was weaker than expected because of the acquisitions. Citi has a last-published neutral rating and A$85.95 target price on the stock, which is down 15% at A$73.20. (stuart.condie@wsj.com)
0046 GMT - Iluka's decision to pause some production of synthetic rutile for several months is weighing on its stock. "Despite a confident recent quarterly report, ILU is cutting SR output into a softer market with a four-month production pause at SR1," Citi analysts say in a note. Otherwise, Iluka's 1H earnings result is mostly in line with expectations, with the exception of a slight miss on the interim dividend, the analysts say. Citi has a neutral rating and A$11.80 target on Iluka, which is 8.1% lower at A$8.57.(rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0037 GMT - Lottery Corp. is expected to bounce back from a lackluster FY 2023 result, Jefferies says. Lottery Corp.'s annual revenue and EBIT missed the bank's forecasts by 5% and 6%, respectively. "Given 1H24 stronger start to jackpot sequences and the full impact of Powerball pricing and retail commission changes in 1H24 (from May 2023), we do not expect this to continue into 1H24," analyst Simon Thackray says. "Active customer growth of 3.2% year-over-year is encouraging and should give further leverage to stronger jackpots." The stock is down 1.6% at A$5.08. (david.winning@wsj.com; @dwinningWSJ)
0032 GMT - The decision by Domino's Pizza Enterprises to cut a target for growing its store network makes it a much lower-growth business than it used to be, says Jefferies. Domino's says it now expects store growth of 7%-9% on a 3-5 year horizon, down from 8%-10% and representing the second reduction it has made recently. In a note, analyst Michael Simotas said the revised medium-term target accompanied a 3% miss on FY 2023 Ebit and indications that franchise profitability has fallen sharply. One bright spot for investors is a bigger cost-cutting program, however. Domino's now expects network savings of A$50 million-A$60 million in FY 2024, rising to A$80 million-A$94 million in FY 2024. That compared to a prior savings target of up to A$59 million across FY 2024-2025. (david.winning@wsj.com; @dwinningWSJ)
2340 GMT - Hub24's 2H FY 2023 result looks strong to Barrenjoey analyst Nick McGarrigle; he says in a note that the company remains the investment bank's preferred pick of the Australian specialist platform sector. He notes that the stock is trading at a 21% discount to rival Netwealth on a like for like FY 2025 price to earnings basis. Barrenjoey says Hub24's net flows have started FY 2024 strongly, with the company remaining a "compelling growth story," gathering around 11% of industry gross flows compared with industry funds under administration share at 6%. Barrenjoey has an overweight call on Hub24. (alice.uribe@wsj.com)
2321 GMT - PSC Insurance's FY 2023 results looks strong, showing a good contribution from both organic and M&A growth, says E&P analyst Olivier Coulon in a note. This, he says, is despite the Tysers joint venture deal not completing. At the same time, E&P sees that the recently introduced FY 2024 guidance being reiterated shows that good organic growth could be expected. E&P reckons the stock could perform reasonably well today. PSC was last up 3.7%, to A$5.00. (alice.uribe@wsj.com)
2253 GMT - Hub24 looks to be increasing focus on the mass market and mass affluent market, say Wilsons analysts in a note looking at the Australian wealth-management-platform provider's FY 2023 results. This is in conjunction with Hub24's native digital advice solution it launched as part of a partnership, as well as ongoing investments scaling its SMSF Access product and increasing functionality for HNW clients. Combined with a healthy net flows expectation, Wilsons reckons the company has an "increasingly attractive outlook." Along with its rival Netwealth, improving investor directed portfolio services flows, would be "further fuel to an already raging fire," says Wilsons. It has an overweight call on the stock. (alice.uribe@wsj.com)
(END) Dow Jones Newswires