0310 GMT - Alcidion's disappointing 1Q performance and capital raising lose it a bull at Bell Potter, where analyst Thomas Wakim is waiting for the medical software provider to execute on new contract wins. Wakim writes in a note that new contract wins, especially in the U.K., remain key to Alcidion achieving its guidance for positive FY 2024 Ebitda. He notes that 1Q cash receipts of A$6.4 million were Alcidion's lowest in more than two years. Bell Potter cuts its target price 50% to A$0.08 and lowers its recommendation to hold from buy. Shares are down 1.4% to A$0.069. (stuart.condie@wsj.com)

0308 GMT - Bravura Solution's latest cost reductions have improved the Australian software provider's cashflow but make top-line growth harder to come by, Macquarie analysts say. They welcome the resolution of the company's troubling cash-burn but warn of the need to maintain revenue growth, with guidance for roughly flat fiscal 2024 revenue incorporating only one of three recent client losses. Cost reductions and lower capital expenditure amplify the challenge, they say. Macquarie raises target price 28% to A$0.83, primarily on lower capex forecasts, and lifts its recommendation to neutral from underperform. Shares are up 8.7% at A$0.875. (stuart.condie@wsj.com)

0251 GMT - Collins Foods keeps its bull at Wilsons ahead of 1H results that the Australian financial advisor's analysts expect to show resilient sales but weaker margins. The analysts write in a note to clients that rival fast-food franchiser Yum!'s 3Q report indicates strong sales growth across Australian KFC stores. They reckon that menu price increases across fiscal 2023 and so far in fiscal 2024 will support 1H top-line growth for Collins, but see cost inflation weighing on margins, with deflation in prices of cyclical food ingredients only kicking in during 2H. They will be looking for management commentary on the likely timing of margin recovery. Wilsons has an overweight rating and A$11.19 target price on the stock, which is up 0.6% at A$9.46. (stuart.condie@wsj.com)

0135 GMT - Revenue, expense trends and outlook commentary will be the key drivers of share price performance during the Australian banks' reporting season, say Morgan Stanley analysts in a note. They reckon capital and credit quality will likely remain strong, and margin movements will again be a primary focus. ANZ, NAB and Westpac are due to report FY 2023 results over the next two weeks, and MS tips their revenue to fall by an average of 2% half-on-half in 2H FY 2023. MS also forecasts the average net interest margin to decline by an average of 6 basis points h-o-h. "We believe deposit pricing and mix will be the biggest margin swing factors," MS says. (alice.uribe@wsj.com)

0024 GMT - Aussie Broadband's acquisition of Symbio should be about 5% EPS accretive in the first year of its ownership, according to Ord Minnett analyst Ian Munro. He writes in a note that his analysis, on a pro-forma basis and assuming A$6 million in synergies, chimes with company guidance. One concern is that Symbio's Singapore and Malaysia ventures have yet to reach profitability. Yet the broadband retailer's larger-than-expected A$120 million equity raising gives it balance-sheet capacity to pursue both organic growth opportunities and acquisitions in the residential and enterprise market, he adds. Ord Minnett maintains an accumulate rating on Aussie Broadband and trims its target price 3.8% to A$4.03 following its equity raise. Shares are down 7.65% at A$3.62. (stuart.condie@wsj.com)

0003 GMT - Aussie Broadband's proposed acquisition of communication-services provider Symbio repaints the telecommunications company's future as one of both inorganic and organic growth, Wilsons analysts tell clients in a note. They observe that the broadband retailer's story has historically been one of organic growth, with the Symbio deal assumed to be a one-off. However, they write that comments by Aussie Broadband now indicate that it could use further acquisitions to meaningfully supplement its organic growth trajectory. Wilsons is reviewing its marketweight recommendation and A$3.76 target price on Aussie Broadband shares. The stock is down 8.9% at A$3.57 following completion of an equity raise. (stuart.condie@wsj.com)

2354 GMT - Yum!'s 3Q result suggests that 1H sales at Collins Foods's Australian KFC restaurants could be stronger than anticipated, Citi analyst Sam Teeger says. Same-store sales at Yum!'s KFC Australia outlets were up 9% in the September quarter. Teeger points out in a note to clients that this is in-line with the performance of Collins's KFC Australia stores for the first seven weeks of its FY 2024, which started May 1, and higher than his forecast of 6% same-store sales growth over 1H. Citi has a neutral rating and A$11.10 target price on the stock, which is up 1.5% at A$9.54. (stuart.condie@wsj.com)

2314 GMT -- Macquarie's 1H FY 2024 result came in weaker than the market and UBS had been expecting, say the investment bank's analysts in a note. A softer than expected performance from Macquarie Asset Management was a driver of the result, UBS says, noting that consensus net profit after tax had already been cut around 35% already year to date for MAM. "The overall guidance for the year suggests some stabilization in 2H FY 2024 earnings but overall we would expect the market to continue to cut earnings expectations for Macquarie," says UBS which reckons that the only silver lining in the result was the announcement of a buyback. This could indicate that the Australian financial company's stock is undervalued. Macquarie falls 2.5%, to A$156.34. (alice.uribe@wsj.com)

2255 GMT -- Macquarie's 1H FY 2024 headline result looks very soft to Citi analysts, and could be seen to be of lower quality than the market was expecting, they say in a note. Citi calls out a miss on revenue in Macquarie Asset Management, and softer outlook revenue expectations for MAM and Macquarie Capital. This, Citi thinks, could speak to a softer environment for asset realizations and deal flow more broadly. Citi does say this could be a timing issue, it still sees there are structural concerns with the result, particularly higher cost and tax, which could drive negative earnings revisions. (alice.uribe@wsj.com)

2246 GMT -- While Australia's private health insurance sector has been viewed as a relative safe haven in a tougher economic environment, Macquarie says it now has multiple data points indicating claims catch- up for the residents portfolio has begun, suggesting long positions in this sector should be viewed with caution. At the same time, Macquarie's analysts in a note have released findings from its annual survey looking at overseas health insurance. It finds that international workers insurance remains the highest margin product in overseas health insurance, noting that Nib's Workers product remains one of the cheapest amongst major insurers, while the Students product is in-line with market averages. (alice.uribe@wsj.com)

1736 ET - Jefferies downgrades Helia to underperform from hold, warning that headwinds are strengthening for the Australian lenders mortgage insurer. In a note, analyst Simon Fitzgerald says Helia's closing stock price of A$3.79 on Thursday sees it trading at a 9.5% premium to net tangible assets. That compares to a historical discount to NTA of around 30%. "However, with claims costs expected to grow and a more difficult environment for high LVR loan originations going forward, we believe a discount is more appropriate," Jefferies says. The bank cuts its price target by 8.6% to A$3.08/share. (david.winning@wsj.com; @dwinningWSJ)

2127 GMT - Charter Hall Retail REIT surprised Jefferies by revealing the value of a portfolio of convenience retail units leased to BP had lifted by 4.1% through the end of October. The gain reflected inflation-linked rental increases, which more than offset an expansion in the portfolio's cap rate to 4.77%, from 4.72%. "We struggle with this, given the 10-year was at 4.92%, and expect Charter Hall Retail REIT's valuations to come under pressure at Dec. 31," says analyst Sholto Maconochie in a note. "Sales and operating metrics were not provided, but we expect these to remain resilient." (david.winning@wsj.com; @dwinningWSJ)

2119 GMT - Building materials supplier CSR has signaled to investors that it expects its aluminum division to return to profit in FY 2025, but Jefferies is skepitcal. In a note, analyst Simon Thackray forecasts a small A$2 million loss for the division. "Although CSR expects raw material costs to ease in 2H of FY 2024 (given lags), geopolitical pressure on oil and petroleum coke prices could see tough aluminum conditions resume as FY 2024 closes out," he says. Jefferies raises its price target on CSR by 7.7% to A$5.60/share following its 1H result. CSR ended Thursday at A$5.66. (david.winning@wsj.com; @dwinningWSJ)

0408 GMT - Origin Energy's largest shareholder could find it harder to prevent a Brookfield-led consortium from acquiring the Australian energy company due to changes in the proposed deal's standstill arrangement. AustralianSuper, which holds a near 14% stake, plans to vote against the consortium's current A$9.53/share proposal. Yet if the offer fails to secure the necessary 75% shareholder approval, an amended standstill arrangement means any acquisition by the consortium of more than a 5% stake must be accompanied by an off-market takeover bid subject to 50.1% shareholder acceptance. RBC Capital Markets analyst Gordon Ramsay says in a note to clients that the consortium could pick up shares at a discount if the stock falls on a rejection of its existing offer, and then make a bid lower than the current one. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

November 03, 2023 00:01 ET (04:01 GMT)