0300 GMT - Orica's C$505-million purchase of Terra Insights from Vance Street Capital looks strategically sound, although details are limited and it doesn't appear to have bagged a bargain, Morgan Stanley analysts Andrew Scott and Julianna Sick say in a note. "While synergies are referred to there is no quantification or indication of where these will come from," the analysts say. "Similarly, we have no track record of revenue growth or other financial history other than the Ebitda CAGR." Orica is down 1.7% at A$15.94, extending its decline after Wednesday's 2.5% loss. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0025 GMT - KMD Brands' fiscal year-to-date sales are weaker than Macquarie analysts had anticipated and leave the outdoor-clothing retailer needing to engineer a recovery against a backdrop of soft consumer demand. KMD's sales are down more than 12% on year, which compares with Macquarie's prior estimate of 6.2% for the six months through January. The weakness was particularly pronounced in its Kathmandu brand, sales of which are down 22% on year. Macquarie sees recovery in Kathmandu as a key priority but notes that KMD is operating amid soft demand and unhelpful weather conditions. Macquarie cuts the target price on KMD's Australia-listed securities by 11% to A$0.62 and stays neutral on the stock. Shares are down 1.35% at A$0.73. (stuart.condie@wsj.com)

0014 GMT - KMD Brands' disappointing trading for the four months through November costs it a bull in Forsyth Barr. KMD reported lower sales across all key brands. Despite a recovery in gross margin, and efforts to reduce costs, operating deleverage contributed to a NZ$16 million decline in Ebitda in the period. "We expect these trends to persist for the remainder of 1H, and anticipate that 2H Ebitda is only slightly lower than 2H of FY 2023 given the prior period featured adverse weather and consumption trends (which we expect may repeat)," analyst Margaret Bei says. "A recovery in earnings and wholesale channel demand may not appear until 1H of FY 2025." Forsyth Barr moves to neutral from outperform. (david.winning@wsj.com; @dwinningWSJ)

2356 GMT - Car Group looks set to rely on pricing to drive its top line as growth in private ad volumes slows, Citi analyst Siraj Ahmed writes in a note to clients. He reckons that current private inventory growth is largely old stock, pointing out that Car Group--which was formerly known as Carsales.com--has said that sales times have recently lengthened. Yield on private ads will benefit from July's 10% price hike and a subsequent tweak in October, he says. Ahmed adds that demand for used cars is picking up, which management say is due to the relative expense of new cars in the current macro environment. Citi has a last-published buy rating and A$29.65 target price on the stock, which is down 0.1% at A$30.73. (stuart.condie@wsj.com)

2309 GMT - REA Group's annual costs are probably tracking toward the top end of the Australian real-estate advertiser's guidance, Citi analyst Siraj Ahmed reckons. He sees potential for costs associated with REA's audience-maximizer service and bonuses stemming from higher-than-expected volume growth to push group cost growth toward a percentage in the mid-teens. Annual listings growth slowed to 5% in November from 16% in October, but Ahmed points out that this is still in-line with REA's six-year average. Citi has a neutral rating and A$159.00 target price on the stock, which was at A$176.43 ahead of the open. REA is 61% owned by News Corp, which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

2149 GMT - Digital property-settlements platform operator Pexa loses a bull in Jefferies after its trading update showed weaker performance across the business. "Transaction volume in Australia has not benefited from the uplift in property listings, and we found little correlation between the two metrics," analyst Roger Samuel says in a note. "U.K. is worse than expected, with further losses from the acquisition of Smoove." The bank downgrades Pexa to hold, from buy, and cuts its price target by 19%, to A$11.45/share. Pexa ended Wednesday at A$10.92. (david.winning@wsj.com; @dwinningWSJ)

2147 GMT - Citi analyst Paul McTaggart can't see a reason to buy Iluka right now." Cheap yes, but lacking near term catalyst," McTaggart says of the miner's stock in a note. He downgrades Iluka to neutral, saying Citi's recent buy call had been thwarted by soft Chinese property starts. Iluka's comments on cost pressures and delays at its rare-earths refinery have added to headwinds, he says. Citi's target on Iluka is cut to A$7.50/share from A$10.20/share. The stock ended Wednesday at A$6.72. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2141 GMT - The takeover bid for Azure Minerals makes other Australian lithium miners and developers look attractive at current stock valuations, Euroz Hartleys says. Azure, which owns a majority stake in the Andover lithium project in Australia's Pilbara mining region, has agreed to a roughly A$1.70 billion takeover by Chile's SQM and Gina Rinehart's Hancock Prospecting. Their A$3.70/share bid implies a A$2.83 billion valuation of the Andover project. That makes "existing producers like Pilbara Minerals look attractive at its current enterprise value of A$9.0 billion," analyst Michael Scantlebury says in a note. "The look through on Wildcat Resources also looks very compelling." Euroz Hartleys has a A$1.33/share price target on Wildcat based on a 35% discount to Azure. (david.winning@wsj.com; @dwinningWSJ)

1037 GMT - LGB Media has a much more efficient model for the Australian segment despite the reduced guidance in the region, Peel Hunt analysts Jessica Pok and Melanie Yang write in a note. Under the five-year strategic partnership with Van Morgan Digital in Australia, LGB will receive a margin share of any direct business in the region without needing to incur a cost base itself, which represents a lower-risk model for LBG, the analysts add. Peel Hunt expects revenue growth of 6% for fiscal 2024, and Ebitda margin to rise to 28% from 25.3%, excluding Betches. Peel Hunt maintains its buy recommendation on the stock but lowers its target price to 135 pence from 145 pence. Shares are down 5.25% at 83 pence. (najat.kantouar@wsj.com)

0805 GMT - Sentiment among participants of Bank of America's monthly global fund manager survey in December is the most upbeat since January 2022 on a Goldilocks 2024 scenario, BofA says. "December FMS sentiment improved to its least bearish level since Jan'22," it says. In a Goldilocks scenario, the economy is growing at a steady pace, preventing a recession, but also not so fast that inflation rises too much. BofA's broadest measure of fund manager sentiment, based on cash positions, equity allocation and economic growth expectations, rose to 3.4 from 2.5. (emese.bartha@wsj.com)

0432 GMT - Australian insurers are well placed to meet rising costs associated with Tropical Cyclone Jasper and ongoing Far North Queensland floods, says S&P Global Ratings in a note. The record flooding S&P points out is ongoing and causing widespread damage in the region, but the cyclone itself was modest. Insurers have reported modest claims numbers to date, which reflects the very low population and property density in the region, S&P says, as well as the ratings company's expectation of underinsurance given affordability constraints in the region. Also, can draw on extensive reinsurance cover should claims-costs escalate. "We would expect only insurers with high market shares in Far North Queensland would trigger their reinsurance catastrophe covers," said S&P.(alice.uribe@wsj.com)

(END) Dow Jones Newswires

December 20, 2023 23:03 ET (04:03 GMT)