0400 GMT - Macquarie analysts are cautious on BlueScope's recent rally, questioning whether the steelmaker's gains can be sustained amid an economic slowdown. BlueScope shares have rallied on recent strength in U.S. steel prices. "Our commodity strategy team expects momentum to fade," the analysts say of U.S. steel-price gains. "We are also cautious about high-value product volumes in Australia in a slowing residential construction market," they say in a note. The analysts raise their target on the stock to A$19.00 from A$18.20 but keep a neutral rating. BlueScope is up 0.1% this session at A$20.59. It has gained nearly 10% since the start of November. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0351 GMT - There are three key risks for Fortescue investors as the company branches out into clean energy, according to Morgan Stanley analysts. Firstly, Fortescue has yet to secure offtake deals for its planned hydrogen production and pricing has yet to be determined, casting a shadow over the double-digit return forecasts estimated by the company, the analysts say in a note. Secondly, contingency for planned capital expenditure hasn't been flagged, so it remains an uncertainty, say the analysts. Lastly, the impact on cash flow from developing these projects could create significant pressure on yields, they say. The MS analysts have an underweight rating and target price of A$16.45 on the stock, which is down 0.3% at A$25.40. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0021 GMT - Technology One loses a bull at Bell Potter after reporting a fiscal 2023 profit that fell short of analyst Chris Savage's expectations. Savage writes in a note that the Australian business software provider's pre-tax profit beat company guidance but was about 2% lower than he had forecast. He is positive on Technology One's strong cash flow but cuts his FY 2024 and FY 2025 earnings forecasts by 2% and 3%, respectively, on lower margin expectations. Target price falls 2.8% to A$17.25 and Bell Potter downgrades the stock to hold from buy. Shares are down 1.9% at A$15.765. (stuart.condie@wsj.com)

0013 GMT - Hub24's investor day provided positive news on the momentum of funds under administration, flows guidance and new migrations of users from other platforms, says UBS analyst Scott Russell. He calls out large migrations of A$6 billion, which implies fund inflow guidance of A$26 billion-A$30 billion over the next two years versus UBS estimates of A$25.8 billion and consensus of A$25.5 billion. UBS notes that the large migrations to the investment and superannuation platform comprise A$4 billion from equity trustees and a new institutional client expected to arrive in December. Still, Hub24 flagged costs of A$4.5 million in FY 2024 associated with the large institutional fund migrations. UBS keeps its neutral rating. (alice.uribe@wsj.com)

0005 GMT - Webjet's 1H performance leaves the Australian travel company in a very strong position to deliver meaningful capital management, RBC Capital Markets analyst Wei-Weng Chen says. Webjet's strong cash generation over the six months through September has helped it amass a cash balance of A$634 million, which should be supportive of the share price if deployed via capital management, Chen writes in a note. He says that Webjet's full-year Ebitda guidance range also looks good, coming in about 2.2% ahead of the average analyst forecast at the midpoint. RBC has an outperform rating and A$8.00 target price on the stock, which is down 0.5% at A$6.575. (stuart.condie@wsj.com)

0000 GMT - Short-term headwinds keep Morgans analyst Liam Schofield cautious on Brickworks despite the Australian building-products supplier trading at what looks like a discount to its net asset valuation. Schofield writes in a note to clients that the stock continues to show long-term value, but lowers his earnings forecasts for FY 2024 and into FY 2025 on the impact of scheduled plant maintenance work and inventory management. He trims target price 2.3% to A$25.30 and stays neutral on the stock, which is down 1.7% at A$25.27. (stuart.condie@wsj.com)

2336 GMT - QBE's quarterly National Association of Insurance Commissioners filings now look to be strongly correlated with results disclosed by the insurer to investors, according to Macquarie analysis. The investment bank's analysts say in a note that quarterly NAIC filings suggest QBE's North American gross written premium contracted 4.9% in 3Q FY 2023, but QBE's crop business grew quickest of the five major insurance licenses. On the gross written premium guidance for FY 2024, Macquarie notes QBE forecasts 10% growth versus its 10.2% and 10.6% consensus forecast. Macquarie has an outperform call on the stock. (alice.uribe@wsj.com)

2325 ET - Australian wealth platform company Hub24 continues to deliver on its net flows pipeline, but there looks to be limited near-term upside risk to earnings or the stock's current multiple, say Macquarie analysts in a note. For 1Q FY 2024, Hub24's revenue's margins were stable at around 35 basis points, but coming periods are likely to be affected by recent retail rate card changes, increased institutional mix and usual fee-tiering impacts, Macquarie says. It expects revenue margins to decline around 2.5 basis points by the end of FY 2025, and cuts its target price 0.3% to A$33.30. Hub was last down 0.9% to A$32.95. (alice.uribe@wsj.com)

2251 GMT - Technology One keeps its neutral rating from Macquarie, where analyst Andrew Gillies likes the Australian business software provider's improved outlook but sees a recent growth driver losing steam. Gillies writes in a note that the company's transition to a software-as-a-service model was the key driver of strong recent growth in annual recurring revenue. This transition is near complete, he adds. Technology One's planned reinvestment limits incremental upside to free cashflow over the medium-term and the stock's valuation looks challenging, Gillies says. He lifts target price 8% to A$16.80. Shares are at A$16.07 ahead of the open. (stuart.condie@wsj.com)

2243 GMT - Cochlear appears to be further growing its share of the hearing-implant market, Morgan Stanley analyst Sean Laaman says in a note. He writes that the 1H implant sales decline reported by Sonova-owned Advanced Bionics looks good for Cochlear, which has already reiterated its guidance for underlying net-profit growth of 16%-23% in FY 2024. With Advanced Bionics also reporting a fall in upgrade and accessories sales, Laaman expects Cochlear to lift 1H revenue from services, upgrades and accessories by 28% on the launch of its latest speech processor. MS has an underweight rating and A$240.00 target price on Cochlear shares, which are at A$260.72 ahead of the open. (stuart.condie@wsj.com)

2207 GMT - A lackluster set of results from Australian banks sees Wilsons Advisory move its portfolio further underweight on the sector. In a note, WA analysts say that recent reporting of major lenders NAB, ANZ and Westpac confirm its views that bank earnings have peaked this cycle. "The results did not point to a promising outlook for earnings growth over the next 12-24 months," says WA. ANZ is still WA portfolio's largest positive position in the banks, partly due to the fact that the lender's continued diversification could mitigate headwinds in Australian retail banking. More widely for the banks sector, WA sees that competition remains intense for mortgages and deposits, while bad debts are likely to continue to rise, and costs are getting bigger. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

November 21, 2023 23:04 ET (04:04 GMT)