0159 GMT - A surge in dealmaking among metals and mining companies is likely to continue into 2024, according to BMI, a unit of Fitch Solutions. It sees demand for M&A supported by global energy-transition tailwinds and easing inflation pressures. Deal activity has been climbing since 2020 and much of it has recently centered around energy-transition minerals, including copper and lithium, it notes. Gold-industry consolidation is also ongoing. "While securing supply to transition metals, major mining companies will also continue to focus on reducing their exposure to coal assets," BMI says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0150 GMT - Citi analysts raise their FY 2024 Ebit forecast for Premier Investments on stronger-than-expected 1H guidance that they think is likely due to margin resilience. The analysts write in a note that, while revenue may have held up better than expected, they see margins as the most likely driver of the guidance. They observe that Premier anticipates about A$200 million in 1H Ebit, compared with prior market expectations for A$181 million. The analysts lift their FY Ebit forecast for the company by 10% to A$321.8 million and increase the stock's target price 6.4% to A$26.50. Citi stays neutral on the stock, which is up 3.0% at A$25.86. (stuart.condie@wsj.com)

0125 GMT - Universal Store gets upgraded to buy from neutral by Citi analyst Sam Teeger, who points to positive developments at rival Australian retailers. Teeger's outlook for fashion retailer Universal Store brightens following Premier Investments' announcement of record Black Friday sales and an Accent Group director buying up stock following the Black Friday period. He also notes recent improved levels of foot traffic and sales at clothing retailers. Citi raises the stock's target price 6.2% to A$3.93. Shares are up 0.9% at A$3.56. (stuart.condie@wsj.com)

0051 GMT - UBS downgrades lithium prices and targets on Australian lithium stocks, reflecting weaker-than-anticipated demand and a robust outlook for supply. The bank cuts its medium-term price forecasts for the battery material by 23%-45%. It downgrades ASX-listed Pilbara Minerals to sell from neutral and cuts its target on the stock to A$3.05/share, from A$3.75. It also lowers its targets for IGO and Mineral Resources. "Our lithium equity valuations are 8-19% lower with significant EPS downgrades (greater than 50% in FY25)," says analyst Dim Ariyasinghe in a note. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0022 GMT - Premier Investments' 1H earnings guidance is stronger than UBS analyst Shaun Cousins had anticipated, but it doesn't shift his bearish view of the Australian retailer. Premier's guidance for 1H EBIT of A$200 million implies a 9.3% on-year decline, which compares with Cousins' prior expectation of a near 16% fall. He writes in a note that strong cost management could be the driver of better-than-expected margins. UBS lifts target price 2.1% to A$24.00 on improved EPS forecasts but keeps a sell rating on the stock amid concern that sales will slow and weigh on margins. Shares are up 3.2% at A$25.91. (stuart.condie@wsj.com)

2359 GMT - EML Payments secures a new bull at Wilsons following the recent update on its strategic review, although the broker's analysts concede that not everyone should be buying the stock. The Wilsons analysts think that the 30% one-day drop in the company's share price drop was overdone given that EML is closer to the end of its review and recovery process than to the start. They write in a note that investors should be aware of the company's track record of pushing back targets and timelines, but think that the risks are balanced to the upside. Wilsons keeps a A$1.17 target price on the stock and raises its rating to overweight from equalweight. Shares are up 2.4% at A$0.87. (stuart.condie@wsj.com)

2253 GMT - More people taking out private health insurance in Australia, alongside increasing population, could be supportive for insurer Medibank, say Jefferies analysts in a note. This is particularly so if the recent claiming patterns seen by Medibank persist, they add. For Medibank, it experienced lower inpatient rehab, ongoing softness in psychiatric and respiratory claims and shortening length of stay for surgery during FY 2023. "The permanence of this behavioral change will only be clear over time, but augurs well for claiming trends," says Jefferies. It keeps its price target unchanged at A$4.00, but raises its rating to buy from hold, on the basis that it believes Medibank is a resilient business with a dominant share. Medibank ended last week at A$3.53. (alice.uribe@wsj.com)

2229 GMT - Australian deposit growth looked slightly stronger in October, but Citi analysts reckon this could reflect seasonality. The bank highlights a historical skew to better deposit growth around August to November, which could be due to the timing of tax receipts. In a note, Citi says it still expects deposit growth to slow on a 12-month view as credit slows, but this will most likely impact banks that have been expanding above the wider system's growth. ANZ and Westpac have seen accelerating deposit growth. Overall, Citi reckons that the soft trends shown in retail banking results are likely to persist in the short term, and that rising deposit costs are likely to continue to pressure margins. (alice.uribe@wsj.com)

2206 GMT - Australian business lending continues to slow as interest rates rise, say Citi analysts in a note looking at regulatory data. The investment bank highlights that over the past 12 months, business credit has slowed from a high of 16% in 2022, to 5%. It now expects business credit growth to moderate to low single digit growth. For the banks, Citi reckons CBA is showing better recent momentum, noting that the recent 2H of FY 2023 reporting season indicated emerging weakness in demand for credit across SME, corporate and institutional lending. (alice.uribe@wsj.com)

2158 GMT - CBA's mortgage growth returned in October after a three-month contraction, which is consistent with Citi's expectation that the worst of the market share loss was due to the timing of cashback removals. CBA went first in removing cashbacks for customers taking out mortgages, Citi says, and the key beneficiary of this was Westpac. "But now that CBA has improved, Westpac has moderated back to system growth," says Citi in a review of regulator mortgage data for October. In other trends, regional lenders have continued to lose share over recent months, while ANZ and Macquarie are still growing. In general, Citi believes mortgage lending has been resilient to higher rates, but is set to slow. (alice.uribe@wsj.com)

2145 GMT - Premier Investments' strong Black Friday performance was in line with Goldman Sachs analysts' expectations, who think that the period pulled forward sales from later in the retailer's fiscal 1H. They think the recent sales strength will likely result in a weaker December and January. Premier Investments' apparel retail looks increasingly challenged by softer consumer spending and rising international competition, the GS analysts add. They reiterate their sell rating. GS has a A$21.50 target price on the stock, which ended last week at A$25.11. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

December 03, 2023 23:00 ET (04:00 GMT)