0341 GMT - Pinnacle is likely to see consensus forecast downgrades for funds under management after posting softer headline FUM and flows for 1Q FY 2024, UBS analyst Shreyas Patel says in a note. The investment bank points out that 1Q FUM missed UBS's expectations by 2% and dropped nearly 2%, largely due to negative mark-to-market impacts. Headline net inflows of A$200 million were softer than the A$900 million that UBS had anticipated. Still, UBS notes that the Australian asset manager's retail segment had robust inflows, while it international division maintained momentum, both of which should support fee margins. It was Pinnacle's lower-margin institutional segment's net outflows that weighed on the group's headline result, UBS adds. It keeps the stock's target price at A$8.50. Pinnacle was recently at A$7.68. (alice.uribe@wsj.com)

0318 GMT - Megaport's disappointing 1Q performance isn't seen by UBS analyst Tim Plumbe as an indication of the communication tech provider's longer-term potential. Plumbe writes in a note that it is still early days for the Australian company's direct-sales strategy and that it has only just filled 90% of sales roles. He acknowledges that Megaport's 1Q port numbers were disappointing, but reckons that the immediate 16% share-price fall is overdone. He cuts the stock's target price 6.7% to A$13.30 but maintains a buy rating. Shares are flat at A$9.52. (stuart.condie@wsj.com)

0310 GMT - The funding of Harvey Norman's share buyback points to the furniture and homewares retailer's desire to use its property asset base to support higher borrowing, UBS analyst Shaun Cousins says. The buyback announcement surprised Cousins but he notes that Harvey Norman has A$4.05 billion in property gross assets, which equates to about A$3.25 a share. Cousins lowers his fiscal 2024 EPS forecast by 10% after Harvey Norman's 1Q performance fell short of his expectations, but he raises his recommendation to neutral from sell on the stock's 8% decline since the start of September. He has an unchanged A$3.75 target price. Shares are down 1.1% at A$3.68. (stuart.condie@wsj.com)

0255 GMT - Carsales.com's positive start to its FY 2024 suggest that market expectations for the vehicle advertiser's annual revenue and earnings look about right, Morgan Stanley analysts tell clients in a note. They say it was no surprise that the ASX-listed company didn't tweak guidance at its annual general meeting, but add that the constancy of outlook should comfort traders that their forecasts are achievable. The MS analysts think that Carsales can meet the market's growth expectations through FY 2026 despite near-term macro challenges in the geographies in which it operates. MS has a last-published overweight recommendation and A$26.50 target price on the stock, which is up 0.5% at A$28.00. (stuart.condie@wsj.com)

0250 GMT - Australian health insurer Medibank looks to have a number of efficiencies at its disposal to maintain low claims inflation and thereby sustain margins above pre-pandemic levels, says UBS analyst Scott Russell in a note. This view comes after the investment bank met with Medibank recently. The company's net margin has been rising since its IPO in 2014 and stepped up during Covid to a peak of 9.1% last year, UBS says. While consensus thinking assumes this normalizes back to pre-Covid sub-8%, UBS reckons the 8-9% range is sustainable for the next three years. Partly assisting Medibank is claims efficiencies arising in several areas including rehab, respiratory, prostheses, as well as the company's historical margin advantage versus peers.(alice.uribe@wsj.com)

0133 GMT - SiteMinder's 1Q trading update suggests that the accommodation-software provider could surpass the market's 1H revenue expectations, Citi analyst Siraj Ahmed says. He writes in a note that while 22% constant-currency 1Q revenue growth puts the company in-line with the average analyst forecast of A$91 million for the December half, reported revenue could be stronger due to forex changes. Citi has a buy rating and A$3.94 target price on the stock, which is up 2.5% at A$4.04. (stuart.condie@wsj.com)

0116 GMT - ResMed's sluggish 1Q growth in U.S. devices revenue suggests that the breathing-tech developer may be done gaining market share, Morgan Stanley analysts say. They tell clients in a note that sales growth elsewhere in the business kept group revenue in line with market expectations. They think that ResMed's control of operating costs looks excellent, with margins under pressure from higher component and manufacturing costs. MS has an equal-weight rating and US$180.00 target price on ResMed's U.S.-listed securities, which last traded at US$134.65. (stuart.condie@wsj.com)

0115 GMT - Australian insurance broker Steadfast is likely to beat FY 2024 guidance after a strong 1Q, Morgan Stanley analysts say in a note. They point out that the company's 1Q underlying earnings before interest, taxes, depreciation, and amortization implies strong operating conditions that are underpinned by rising premium rates. It's also well ahead of full year guidance. In the U.S., MS sees that Steadfast is already seeing cross-sell opportunities following its acquisition of insurance agency group ISU Group.(alice.uribe@wsj.com)

0114 GMT - ResMed's shares look oversold to Citi analyst Mathieu Chevrier, who remains bullish on the stock despite continued concerns about the potential for weight-loss drugs to affect demand for its breathing tech. Chevrier lowers his medium- and long-term sleep revenue forecasts by about 15% on the anticipated impact of glucagon-like peptide 1, or GLP-1, drugs on sleep apnea. Yet he also welcomes ResMed's cost reductions and maintains a buy rating on the stock, which has lost more than a third of its value since August. Citi cuts its target price 26% to A$29.00. Shares are up 0.65% at A$21.70. (stuart.condie@wsj.com)

0100 GMT - NAB is staying disciplined on Australian mortgages and pursuing growth in target segments like lending to the agriculture and health sectors, business deposits and unsecured consumer lending, say Morgan Stanley analysts in a note. Even so, MS sees downside risk to consensus earnings estimates ahead of the Australian major lender's FY 2023 results next month. Deposit pricing and competition could be a swing factor for margins, MS reckons, along with the mix between different types of savings accounts. Growth in expenses and any outlook commentary will be of note to investors. MS forecasts a 2H FY 2023 pre-provision profit of A$5.59 billion and cash profit ex notable items of A$3.64 billion, versus consensus of A$5.74 billion and A$3.72 billion, respectively. (alice.uribe@wsj.com)

0047 GMT - Shares in footwear retailer Accent Group are likely to trade on sales momentum and could come under pressure as Australian inflation remains stubbornly high, Citi analysts write in a note. They tell clients that new standalone Hoka stores look set to contribute to Accent's store rollout from this point, noting the popularity of the brand and the potential for store growth to surpass market expectations. Nonetheless, Australia's stubbornly high inflation and further central-bank interest rate rises remain potential headwinds to sales momentum. Citi expects the Reserve Bank of Australia to raise its cash rate in both November and December. Citi has a buy rating and A$2.12 target price on the stock, which is up 2.75% at A$1.87. (stuart.condie@wsj.com)

2342 GMT - Australian insurance broking company Steadfast has kept its FY 2024 guidance unchanged, which could reflect acquisitions completing quicker than expected, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. They say that while the guidance is stable, 1Q FY 2024 earnings growth looks to be tracking stronger, but note that Steadfast has flagged continued rate increases by insurers from catastrophes and claims inflation as well as volume growth that is contributing to performance. GS makes no earnings changes following Steadfast's 1Q earnings which were released last week. (alice.uribe@wsj.com)

Westpac could start buying back shares after the bank's restructuring costs came in lesser than anticipated among prereleased significant items, Goldman Sachs analysts Andrew Lyons and John Li say in a note. Westpac said it would take a A$140 million hit for FY 2023 from costs tied to simplifying the business and discontinuing some specialist businesses. While the analysts "had hoped that Westpac would have provided more aggressively for restructuring costs with a view to accelerating its cost reset program," the lower-than-expected total means it could unveil a A$1 billion on-market buyback alongside its FY 2023 result, they say. (alice.uribe@wsj.com)

Janus Henderson's operational turnaround is starting to bear fruit and recent share-price weakness prompts Bell Potter to upgrade the stock to buy from hold. BP analyst Marcus Barnard says in a note that, amongst other things, the company has lowered costs to enable investment elsewhere in the business and investment performance has remained strong. In a preview of Janus Henderson's upcoming 3Q results, BP says it expects the company to report assets under management of $306.2 billion, down 4.9% from $322.2 billion at the end of 1H. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

October 29, 2023 23:59 ET (03:59 GMT)