0150 GMT - The possible combination of Woodside and Santos into a single energy giant holds multiple attractions for Macquarie analysts. They tell clients in a note that a combined Woodside-Santos entity would have scale in liquefied natural gas to compete with global majors. An acquisition of Santos by Woodside would materially improve the latter's free cash flow and deliver superior dividends, they say. The analysts add that synergies could be worth A$0.45-A$0.70/Santos share, including US$125 million-US$200 million in annual cost savings. Macquarie has a neutral rating and A$31.00 target price on Woodside shares, which are up 0.9% at A$30.29. (stuart.condie@wsj.com)

0121 GMT - Wesfarmers loses a bull at UBS as share-price gains and lower lithium prices leave the industrial-retail conglomerate looking fairly valued. Analyst Shaun Cousins cuts his recommendation to neutral from buy, noting that the stock's 18% appreciation since Jan. 2 compares with a 3.3% rise across an index of Australia's 100 largest companies. He lowers EPS forecasts for the company by 1.0% for FY 2024 and by 4.4% for FY 2025, citing decreased lithium prices and a weaker earnings outlook across other units. Wesfarmers' retail divisions remain well-positioned, he adds in a note to clients. UBS lowers the stock's target price 1.8% to A$55.00. Shares are down 0.7% at A$54.02. (stuart.condie@wsj.com)

0039 GMT - Hipages's subscription model has shown resilience over a challenging period and the Australian tradesperson marketplace offers good value, Shaw & Partners analysts say. They forecast average annual revenue growth of 13% through fiscal 2026, with costs rising by an average 7% over the same period. Positive cashflow expected in 2H FY 2024 will be a key milestone and should lower risk, they say in a note. Recent share-price weakness gives investors an opportunity, they add. Shaw & Partners initiates coverage of the stock with a buy rating and A$1.30 target price. Shares are down 0.7% at A$0.715. (stuart.condie@wsj.com)

0017 GMT - Bravura Solutions gets a new bull at Shaw & Partners, where analysts see the wealth-management software provider building a platform for future profitability. The Shaw analysts write in a note that they anticipate average annual revenue growth of 4% through fiscal 2026, with a strengthened balance sheet, new leadership and a refreshed board supporting a company that had previously lost its way. Bravura's shares have outperformed recently but there is still plenty of unrealized value, they say. Shaw & Partners initiates coverage of the stock with a buy rating and A$1.00 target price. Shares are up 4.2% at A$0.865. (stuart.condie@wsj.com)

2252 GMT - Mirvac's slow progress in selling assets is bringing the Australian property developer's gearing into focus. Mirvac hasn't yet been able to sell 367 Collins Street in Melbourne, which has a book value of A$371 million. When combined with delayed settlements at Green Square in Sydney and slow sales of other completed apartments, this suggests Mirvac's gearing will be at the upper end of its 20%-30% target in 1H of FY 2024, Morgan Stanley says. "This is not great optically, albeit it could be seen as a timing issue," analyst Lauren A. Berry says in a note. "In short, cash has gone out to projects, but the monetization process is not immediate." (david.winning@wsj.com; @dwinningWSJ)

2242 GMT - Mirvac's outlook for the remainder of FY 2024 looks less certain to Morgan Stanley, which downgrades the property developer to equal-weight from overweight. "Resi sales are slower than expected, apartment settlements are delayed, and asset sales progress is stalled," analyst Lauren A. Berry says in a note. "We now expect a 38/62 split of 1H/2H FY 2024 EPS, putting a lot of pressure on deliverables in the next six months." Morgan Stanley cuts its price target by 9.8% to A$2.30/share. Mirvac ended Wednesday at A$2.11.(david.winning@wsj.com; @dwinningWSJ)

2236 GMT - It seems unlikely that Washington H. Soul Pattinson is about to walk away from its bid for Australian wealth manager Perpetual, says Bell Potter analyst Marcus Barnard in a note. This comes after WHSP increased its "relevant interest" in Perpetual up to 11.66%. BP reckons that WHSP would be putting pressure on Perpetual management and possibly other shareholders to accept their offer, or considering what sort of higher offer might get approval. "With the market cap now A$2.9 billion, WHSP probably needs to increase their offer to have a chance to succeed," says BP which also sees that with Perpetual now appearing to be "in play" it's likely there will be further bids. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

December 13, 2023 23:14 ET (04:14 GMT)