0057 GMT - Australian major banks are likely to see declining 2H FY 2023 earnings continue into FY 2024, says Morgans analyst Nathan Lead in a note. Of note is net interest income, which contributes around 80%-85% of major bank revenue. Morgans says it expects NII to continue to be pressured by slowing credit growth, loan and deposit competition. Still, Morgans also sees that Australian major lenders remain well capitalized globally, which provides the capacity to undertake buybacks, insulate against a harder economic landing, and provide growth funding options. Morgans reckons ANZ may announce a buyback once regulatory decisions are made about its bid to buy Suncorp's bank. (alice.uribe@wsj.com)

0043 GMT - Collins Foods' 1H results announcement suggests that the Australian fast-food operator has grown more positive on its Taco Bell operations, Citi analyst Sam Teeger says. He points out in a note to clients that the franchise's same-store sales growth has accelerated so far in Collins' fiscal 2H, to 9% from 8% in 1H. After a troubled launch phase, Taco Bell sales growth was likely helped by a delivery partnership, as well as improved product quality and value. Crucially, Collins will be reviewing its prior pause on developing the franchise in 2H, he adds. Citi has a neutral rating and A$11.10 target price on the stock, which is up 10% at A$11.12. (stuart.condie@wsj.com)

0038 GMT - Concerns that UBS had about QBE's short-term catastrophe costs and crop margins look to be overdone, says the investment bank's analyst Scott Russell in a note after the insurer's 3Q FY 2024 trading update. UBS attributes this view to the fact that QBE's FY 2023 guidance items have been reaffirmed. Having now passed the seasonal peak U.S. catastrophe season, UBS reckons the earnings outlook into FY 2024 is positive. It raises the stock's target price 2.6% to A$20.00 and keeps its buy rating on its cheap valuation. The stock is 0.6% lower at A$15.54. (alice.uribe@wsj.com)

0037 GMT - Collins Foods' 1H earnings and net profit were better than expected by Wilsons analysts, who are intrigued by the fast-food operator's failure to reiterate its expectation for full-year European margin contraction. The Wilsons analysts say that 1H Ebitda of A$75.9 million and net profit of A$31.9 million, both on a normalized basis, were respectively 12% and 28% ahead of their forecasts. They add that while the Australian company reiterated its margin outlook for its domestic KFC restaurants, it made no mention of its prior expectation for limited margin contraction at its European operations. Wilsons has an overweight rating and A$11.19 target price on the stock, which is up 9.4% at A$11.05. (stuart.condie@wsj.com)

0017 GMT - QBE's 3Q FY 2024 update prompts confidence in the company's ability to grow and stabilize earnings, say Morgan Stanley analysts in a note. The insurer's update shows resilient pricing and investment yields, and lower catastrophes for 3Q, MS notes. QBE reported catastrophe costs were $250 million in July-October, with $350 million remaining for November to December. MS reckons this means QBE looks to be running $100 million-$150 million below budget, and bakes in $85 million for the 2H FY 2024 reserve top-up. (alice.uribe@wsj.com)

0010 GMT - Macquarie analysts are hoping that Fisher & Paykel Healthcare's 1H results include some insight into 2H trends in hospitals consumables revenue and sleep-apnea patient volumes. They write in a note to clients that they are expecting a 1H Ebit margin of 17.2% and a net profit of NZ$102 million, both of which they believe are lower than average analyst forecasts. They currently forecast a 12% rise in the medical-device supplier's full-year homecare revenue to NZ$618 million, but point out that the number of new sleep-apnea patients is a key driver and say they want more detail. Macquarie trims the stock's target price 1.3% to NZ$23.50 and keeps a neutral rating, which is down 0.4% at NZ$21.96. (stuart.condie@wsj.com)

2328 GMT - Regional Australian lender Bendigo and Adelaide Bank is tracking well in its quest to improve operational efficiencies through its cost management initiatives, Goldman Sachs analysts Andrew Lyons and John Li reckon the path to bring the company's Cost-To-Income Target toward 50% in the medium term remains difficult. At the same time, they say in a note, the banking sector's pressured net interest margins amid ongoing competition and Bendigo's weaker volume momentum in 1Q FY 2024 prompts it to revises itsFY 2024/25/26 earnings per share down by 4%/6%/6%, respectively.(alice.uribe@wsj.com)

2321 GMT - Aeris Resources's A$30 million capital raising may not repair its balance sheet sufficiently, Macquarie says in a note. Aeris will have net cash of A$10.5 million on a proforma basis. "However this excludes trade creditors of A$63.9 million at the end of 3Q of 2023," Macquarie says. "Aeris may need to raise additional equity or debt in 2024 to further bolster its balance sheet unless base metals prices significantly improve from current levels." Macquarie assumes Aeris will fully draw down a debt facility with Washington H. Soul Pattinson in early 2024. It drops to neutral on the stock, from outperform. (david.winning@wsj.com; @dwinningWSJ)

2314 GMT - QBE's 3Q update shows that its group wide rate increases are still very strong, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. Still, they point out that increases are softer in its international lines, than in Australia or North America, and reckon that the softer international rate likely reflects the mix of renewals. At the same time, catastrophe experience looks benign for QBE over recent months, but GS notes there was no update provided on expenses and the extent to which this will be relied upon to help meet guidance. Into the future, GS sees that an improving outlook on reinsurance renewals in January, along with catastrophes that likely to be within budget for FY 2023, suggest the potential for less pressure into FY 2024. (alice.uribe@wsj.com)

2311 GMT - Morgan Stanley turns bullish on Orora, pointing to a 24% selloff in the packaging company's stock since it announced a deal for Saverglass in September. "Following this fall, we estimate that Saverglass is currently valued at only 4.3x enterprise value-to-Ebitda," analyst Andrew G. Scott says in a note. "We would argue that, even for skeptical investors, this is attractive." Orora's stock is trading at a significant discount to history, while a shift in consumer habits toward tequila should benefit Saverglass. Also, the potential removal of Chinese tariffs on Australian wine imports should boost Orora's glass business. "The current share price is simply too low to ignore, in our view," MS says, moving to overweight, from equal-weight. (david.winning@wsj.com; @dwinningWSJ)

1747 ET - WiseTech Global's reiterated earnings guidance is still seen by Macquarie analysts as representing what would be a solid outcome for any large Australia-listed company. The analysts are looking for FY 2024 Ebitda growth of 19%, which sits comfortably within the logistics software provider's guidance for 18%-27% growth. They acknowledge in a note that WiseTech flagged later product releases and a weaker macro environment as headwinds, while observing that the company's move into landside logistics adds a degree of revenue cyclicality. They maintain a neutral rating and A$58.00 target price on the stock, which is at A$65.05 ahead of the open. (stuart.condie@wsj.com)

2145 GMT - Perseus Mining's newly purchased 19.9% interest in Orecorp means it's highly unlikely that a takeover by Sivercorp Metals will succeed, Euroz Hartleys says. But will Perseus launch its own bid? In a note, analyst Michael Scantlebury says Perseus's balance sheet is in excellent shape, with cash and bullion of US$594 million at the end of September and no debt. "Perseus's financial strength could cover the development cost for the Nyanzaga gold development," which was forecast to be US$474 million in a definitive feasibility study released in August last year, he says. Euroz Hartleys cuts its price target on Orecorp by 24% to A$0.65/share. Orecorp ended Monday at A$0.475. (david.winning@wsj.com; @dwinningWSJ)

2142 GMT - QBE catastrophe claims for the four months to October performed better than expected, Jefferies analysts say in a note. The commercially focused insurers reported net catastrophe claims in the year to October of around $930 million, and has $350 million in allowance left for November and December. For this reason, Jefferies expects a slightly better result for QBE's FY 2023 catastrophe claims, noting that net catastrophe claims of $250 million for 2H FY 2023 to October compares to $400 million in allowance. Jefferies has a buy call on the stock. (alice.uribe@wsj.com)

1451 ET - Shoppers continued the strong trend on Cyber Monday, according to data collected by Shopify. US, UK and Australia were the top for deal-hunters on Cyber Monday, the follow up to Black Friday, a day that is more traditionally online-shopping oriented. Average cart price on Cyber Monday was similar to Black Friday's at $106.86. US shoppers had an average cart size of $120.90, while Canadians spent similarly on average to Black Friday at 171.60 Canadian dollars, the equivalent of US$125.83. Shares are up 5.2% at C$101.22. (adriano.marchese@wsj.com)

(MORE TO FOLLOW) Dow Jones Newswires

0528 GMT - A significant majority of Australia's large pension funds plan to increase allocation to international assets over the next two years, an NAB report of 41 funds that manage around A$2 trillion says. The report finds that pension funds allocation to offshore investments sat at 47.8% in 2023, up from 46.8% in 2021. The funds indicated a strong preference for unlisted assets, particularly international infrastructure, private credit and international property, and plans to increase exposure to those sectors over the next two years. "This report highlights continued internationalization of investment portfolios and the ongoing challenge for large funds in deploying incoming capital to the domestic market without amplifying concentration risk," the report says. (alice.uribe@wsj.com)

0501 GMT - The growing size of Australia's pension funds will see them continue to actively support companies they are invested in as the businesses make bigger capex plans as they look toward net zero business models, says Fiona Reynolds, UN Global Compact Network Australia Chair. At the same time Reynolds, who has also been the CEO of a key Australian pension fund industry association, thinks the relationship between companies and institutional investors will move from target setting for example, to partnerships which encompass a long-term view of the energy transition. "That does require more of a connected partnership than in the past," she tells Dow Jones Newswires in an interview. "Investors need to be supporting the companies in making the changes, and providing the capital needed." (alice.uribe@wsj.com)

(END) Dow Jones Newswires

November 27, 2023 22:58 ET (03:58 GMT)