0246 GMT - Australian data-center operator NextDC could win more customer contracts and lower costs by further improving its sustainability practices, Jefferies analyst Roger Samuel reckons. He tells clients in a note that cooling equipment with liquid-immersion as rack density increases could be an option. This would further improve its industry leading power-usage effectiveness, lowering operating expenses and potentially shaving up to 20 basis points off borrowing costs through green loans. Jefferies cuts its target price for the stock by 1.2% to A$15.30 after trimming its fiscal 2024 revenue forecast by 1%. It keeps a buy rating on the stock, which is up 2.2% at A$12.765. (stuart.condie@wsj.com)

0204 GMT - Bank of Queensland's fiscal 2023 results look poor to UBS analysts, who remain unenthused by the stock despite its low valuation. They are concerned by the 21bp decline in net interest margin through 2H, and say in a note that the lender will find it challenging to arrest this decline while still growing lending volumes. The bank is making progress on its digital transformation and efficiency improvements, but more is needed and regulatory risks remain over remediation of previous anti-money laundering failures. UBS has a sell rating and A$5.00 target price on the stock, which is down 5.45% at A$5.465. (stuart.condie@wsj.com)

0121 GMT - Mirvac could look to sell nearly three-quarters of the offices that it currently owns, as it doubles down on residential property, says Barrenjoey. At its recent investor day, Mirvac signaled that it could release up to 50% of its invested capital in offices over time with a view to concentrating on premium assets. "This could involve, in our view, a potential sale of up to 17 out of its 24 office assets, leaving seven premium assets with current book value of A$3 billion," analyst Ben Brayshaw says in a note. Barrenjoey thinks any drive to sell the office assets wouldn't happen quickly, indicating a 3-5 year timeline. (david.winning@wsj.com; @dwinningWSJ)

0056 GMT - Morgans says it's less optimistic on the future value of Origin Energy than the company's more vocal shareholders. Australian Super holds 13.7% of Origin's stock and has expressed its view that the offer by Brookfield and EIG is substantially below its estimate of the company's long-term value, Morgans says. The consortium Tuesday secured approval from Australia's competition regulator for the takeover, which has an implied price of A$8.85/share. "We see major challenges for its Energy Markets division as the company increases capital investment in future years while reducing phasing out reliance on its legacy coal generation asset," analyst Max Vickerson says in a note. "Our fundamental discounted cash flow valuation is lower than the current bid price." (david.winning@wsj.com; @dwinningWSJ)

0043 GMT - Baby Bunting's cost-cutting measures get a warm welcome from Macquarie analysts, who warn that the Australian baby-goods retailer continues to face headwinds from consumer sentiment and currency moves. The analysts lift their EPS forecasts for the three fiscal years through fiscal 2026 by 4% after Baby Bunting said that margins had expanded by 70 basis points so far in fiscal 2024. Yet forex exposure offsets some of the benefit and Baby Bunting is only hedged to the end of its fiscal 1Q, they write in a note to clients. Macquarie maintains a neutral rating and A$2.10 target price on the stock, which is up 1.0% at A$2.02. (stuart.condie@wsj.com)

2329 GMT -- Analysts are likely to cut forecasts for Bank of Queensland's fiscal 2024 cash earnings by between 5% and 10% after the lender fell short of fiscal 2023 expectations, E&P Capital analyst Azib Khan says. The regional bank's fiscal 2023 cash earnings were 3% lower than Khan had anticipated. Khan tells clients in a note that 2H net interest margin of 1.58% was 7 basis points lower than both E&P and the market had forecast. Lower margin expectations and higher cost forecasts will impact the earnings outlook, Khan says. More positively, asset quality and capital reserves were both stronger than Khan had forecast. E&P has a A$5.00 target price on the stock, which is down 3.6%, at A$5.57. (stuart.condie@wsj.com)

2157 GMT - Eagers Automotive's A$245 million purchase of a multi-brand car dealership portfolio that should add A$1 billion in annual turnover looks like a solid acquisition to Jefferies. Still, it's a deal that requires robust scrutiny because Eagers is acquiring the assets from Nick Politis, one of the company's non-executive directors, Jefferies says. "Of further consideration, Nick Politis is one of the Southern Hemisphere's leading auto entrepreneurs, and he continues to reduce his exposure to the industry at a time of arguably peak margins," analyst John Campbell says in a note. Jefferies has an underperform call on Eagers's stock. (david.winning@wsj.com; @dwinningWSJ)

2144 GMT - How pharmaceutical company CSL can expand profit margins within its CSL Behring division will be a focus of its capital markets day on Monday. In a note, Jefferies says it expects any margin improvement to take time. CSL Behring is implementing a plasma collection network that is more efficient and should lead to gross margin expansion over the longer term, analyst David Stanton says in a note. This will be achieved partly through lower donor fees and rolling out its high-margin Hemgenix and Garadacimab products. "In addition, the new Rika Plasma Collection System has the potential to increase revenue and lower costs over the longer term," Jefferies says. "Our analysis suggests the maximal gross margin improvement for CSL Behring from the Rika device in the U.S. is circa 600bps." (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

October 11, 2023 00:00 ET (04:00 GMT)