0313 GMT - WiseTech Global's growth drivers remain intact despite what looks like an effective guidance downgrade by the logistics software provider, UBS analyst Lucy Huang says. She writes in a note that WiseTech's acknowledgement that its reiterated FY 2024 revenue and Ebitda guidance includes factors such as currency tailwinds suggests a rough 2% downgrade to her underlying assumptions. She lowers her FY 2025 and FY 2026 revenue, Ebitda and free cashflow forecasts to reflect slightly softer underlying macro conditions over the next 12 months, but keeps a buy rating on the stock. UBS lowers target price 0.6% to A$79.50. Shares are up 2.3% at A$65.53. (stuart.condie@wsj.com)

0203 GMT - Praemium's outlook commentary provided at its AGM prompts a material downgrade of its near-term earnings expectations by Canaccord Genuity analysts. CG reckons the lower earnings forecast reflects lower average platform revenue margins and the impact of a strategic investment in the business to deliver permanent earnings improvements. CG lowers Praemium's 1H FY 2024 Ebitda to A$9.1 million from A$12.4 million projected earlier. Also, while the investment advice company's flagged revenue optimization initiatives look to be its main avenue to earnings recovery, the timing of these is uncertain, the analysts say in a note. CG cuts its target price 11% to A$0.71. The stock is 7.8% higher at 41.5 Australian cents.(alice.uribe@wsj.com)

0131 GMT - Mortgage competition remains an issue for Australian banks, says JP Morgan analyst Andrew Triggs in a note. This material headwind may persist for at least six months or more, he reckons. Still, JPM calls out Westpac, which was able to offset its outsized exposure by managing its deposit costs well. ANZ will likely underperform on net interest margins over the next two to three years, partly due to a potential pick-up in competition in institutional banking, it says. JPM keeps its overweight ratings on Macquarie and NAB, while CBA and regional lender Bank of Queensland are least preferred and have underweight calls.(alice.uribe@wsj.com)

0123 GMT - Insignia and AMP's financial-advice units aren't likely to see any positive impact to their 2024 bottomlines from proposals set out in the government's Quality of Advice Review, Morgan Stanley analysts say in a note. The investment bank says reforms in the financial advice industry will take some time and in the near term, the sector will continue to be challenged. MS thinks investment platforms like Hub24 and Netwealth will continue to take market share from AMP and Insignia. The latter may be most affected as it transitions its MLC Wrap platform, which is likely to lead to larger outflows until the transition is completed at the end of FY 2024.(alice.uribe@wsj.com)

2349 GMT - QBE's 3Q FY 2023 update was mainly as Citi analysts were expecting. In a note they call out that a benign hurricane season in the U.S. means that there is still $380 million in the insurer's catastrophe allowance for the last two months of the year which suggests to them there is likely a favorable variance. Still, Citi points out that the potential of a slightly adverse crop result in FY 2023 may offset this. In its update, QBE suggests that the supportive premium rate environment should continue into FY 2024, and with Citi's expectations largely met in the 3Q update, it keeps its buy call on the stock. (alice.uribe@wsj.com)

2335 GMT - Australian wealth managers should get benefits from financial advice reforms that will lower the cost of service, with 2024 likely to bring modestly lower outflows for the under-pressure sector, say Morgan Stanley analysts in a note. Still, they see that a return to inflows will demand a decisive and consistent change in strategy, including things like new distribution channels and prioritizing product development. MS favors GQG, which has strong inflows, and Perpetual, which it reckons has a range of growth options. For Magellen, MS thinks it faces further outflows, but notes that it has a strong balance sheet, and Platinum is modestly improving but still managing a negative flow outlook. (alice.uribe@wsj.com)

2332 GMT - Macquarie is likely to see operating conditions improve in FY 2025, say Morgan Stanley analysts in a note. While Macquarie is cheap currently, the investment bank thinks it still needs catalysts like a recovery in capital markets or more evidence of structural growth in green energy. MS reckons these are likely to emerge in FY 2025, prompting its analysts to expect Macquarie to see more than 20% earnings per share growth on normalizing performance fees and gains on sale. MS says commodities income is also stabilizing, which has been a concern for investors. (alice.uribe@wsj.com)

2312 GMT - The outlook for Australian insurers is positive into 2024, says Morgan Stanley in a note. The investment bank took a positive stance on these companies in 2023, and it thinks investors can still benefit entering 2024 with either group. Suncorp and IAG are the best stocks to own in early 2024, says MS, partly due to pricing in personal lines. But global insurer QBE faces headwinds, with commercial pricing slowing. (alice.uribe@wsj.com)

2252 GMT - Healius's A$187 million capital raising was necessary, despite the pathology company benefiting from demand for PCR testing during the Covid-19 pandemic, says Morgan Stanley. Healius's net debt-to-Ebitda was 3.5x at the end of FY 2023, requiring temporary covenant relief. In a note, analyst Sean Laaman says this would have risen to 3.7x prior to the capital raising. "However, if we were to assume that Healius delivered FY 2024 Ebit of A$64 million (instead of our A$74 million) then leverage would be 4.0x," he says. "Given A$64 million would still require a material net increase of 3x the 1H Ebit outcome we see the capital raise as necessary." Morgan Stanley estimates Healius's proforma FY 2024 leverage at 1.95x. (david.winning@wsj.com; @dwinningWSJ)

2233 GMT - Autosports is likely to beat guidance for a 1H pretax profit of A$50 million-A$52 million, says Wilsons following the car dealership's trading update. In a note, analyst James Ferrier says confidence of an earnings beat is grounded in Autosports's strong order book and near-term vehicle supply. He also points out that the company has a track record of surpassing guidance. At its annual meeting of shareholders last week, Autosports said it expects the prestige and luxury vehicle market to remain resilient in 2H. "Diminishing expectations of a material earnings correction may be the catalyst for a share price re-rating," says Wilsons, highlighting the stock's 6x price-to-earnings ratio and 9% dividend yield. (david.winning@wsj.com; @dwinningWSJ)

2213 GMT - Clinuvel's treatment for erythropoietic porphyria--a condition that causes severe skin reaction and pain when exposed to sunlight--looks to have at least 3-4 years before it faces competition, says Bell Potter. That view has hardened after Mitsubishi Tanabe recently initiated a new Phase 3 trial with its rival drug candidate. In a note, analyst Thomas Wakim says this likely pushes back potential approval of a competing drug to Clinuvel's Scenesse treatment until 2027 at the earliest. "In the short-term, Scenesse will continue to be the only approved treatment for EPP patients," Bell Potter says. "Longer-term, even if potential competition does come to market in several years, we don't expect it to cannibalize Clinuvel's product which has an impressive >90% long-term treatment continuation rate." (david.winning@wsj.com; @dwinningWSJ)

2211 GMT - Restaurant Brands NZ is likely to meet its FY 2023 net profit guidance, even as trading in Australia softens slightly and the macroeconomic outlook weakens, according to Macquarie. It says anecdotal evidence suggests a relatively sharp decline in Australian consumer sentiment, with slowing discretionary spending. Despite this, Macquarie sees fast food holding up within a broader drop in spending in restaurants and cafés as a percentage of total spend. That reflects consumers trading down, and existing customers remaining loyal. Macquarie reckons Restaurant Brands will likely deliver positive same-store sales growth in Australia in 4Q, albeit slowing from the previous three quarters. (alice.uribe@wsj.com)

2158 GMT - Brickworks is likely to face an earnings squeeze this year from higher cap rates affecting its Industrial Property portfolio, Ord Minnett says. In a note, analyst James Casey says an expansion in cap rates to 5.2%, from 4.1%, is likely to drive an around 10% decline in the value of the property portfolio. As a result, Ord Minnett lowers its FY 2024 net profit forecast to A$55.3 million, from a prior projection of A$220.3 million. "We note the property revaluations are non-cash and we expect the company to maintain its dividend given its retained earnings of A$2.99 billion," says Ord Minnett, which has a hold call on Brickworks stock. (david.winning@wsj.com; @dwinningWSJ)

2144 GMT - The highlight within a soft trading update by Adairs was the performance of its Mocka brand. Adairs said Mocka's profitability continues to improve and margins have been strengthening as a result of lower stock levels and cost control. Mocka's sales fell 2.4% in the first 21 weeks of FY 2024, but this was better than the declines by the company's other brands. "The recovery in Mocka is consistent with recent NAB online retail sales data," Wilsons analyst John Hynd says in a note. That may suggest the structural growth in online compared with bricks and mortar is providing a partial offset in a difficult macro context, he says. Wilsons, which has an underweight call on Adairs, raises its price target by 10% to A$1.10/share. Adairs ended last week at A$1.49. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

November 26, 2023 23:02 ET (04:02 GMT)