0338 GMT - CAR Group's fiscal 2024 guidance contains a subtle upgrade despite the vehicle classifieds provider maintaining its headline outlook, RBC Capital Markets analyst Wei-Weng Chen writes in a note. Chen shares with clients the news that CAR's management used an investor call to confirm that its outlook has effectively improved, albeit not by enough to justify increasing top-line guidance for good revenue growth at a group level. Chen explains that CAR sees dealer and media revenues being stronger than previously expected, and private revenue being lower. Australian dealers contribute more revenue than private customers. RBC has a last-published outperform recommendation and A$33.50 target price on the stock, which is up 1.6% at A$34.00. (stuart.condie@wsj.com)

0303 GMT - CAR Group's improved outlook for its Australian dealer business should prompt some analysts to upgrade their fiscal 2024 expectations, Jefferies analyst Roger Samuel says. He points out in a note to clients that the vehicle classifieds provider said it now expects "good" growth in dealer revenue, compared with previous guidance for "solid" growth. Dealers represent 51% of CAR's Australian revenue, he adds. CAR's improved view for its largest domestic revenue generator should offset any concern over private revenue growth, which the company now expects to be "solid" rather than "good". Jefferies has a last published buy recommendation and A$38.33 target price on the stock, which is up 0.8% at A$33.73. (stuart.condie@wsj.com)

0216 GMT - Jefferies analysts see the outcome of South32's Eagle Downs sale as positive, and say that combined with South32's royalty claim against IGO "reveal an increased focus on enhancing balance-sheet resilience through crystallization of hidden portfolio value." South32 is down 1.6% at A$3.09, amid a retreat in Australian mining stocks. The Jefferies analysts keep a buy rating and A$4.20 target on South32. They say they hadn't included the Eagle Downs project in their valuation of the company. "Ongoing capital management strategies could see further rationalization of the portfolio from noncore assets, further royalty agreements or sales, and financial-asset transactions to support balance-sheet integrity through the development of Hermosa-Taylor," they say. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0134 GMT - Beach Energy doesn't appear to have the requisite scale to survive an energy transition, says Citi and suggests it has two choices going forward. Firstly, it could enter "harvest mode" by spending capex on the highest-margin opportunities and most prospective exploration, both adjacent to infrastructure hubs. For this, Beach would need to slim down operations and restructure to become leaner, while paying out a majority of its profit to shareholders, analyst James Byrne says in a note. Another option is to achieve scale by embarking upon a significant M&A program, Citi says. "This is because the company has no material 2C opportunities adjacent to its five infrastructure hubs," says Citi, referring to contingent resources. (david.winning@wsj.com; @dwinningWSJ)

0115 GMT - JB Hi-Fi management is comfortable with its relatively large cash balance at the end of the half-year, executives say on an analyst call, arguing it gives the company capacity to capitalize on any near-term opportunities. That could either be an unexpected inventory build or an M&A. JB Hi-Fi ended the half year with A$488 million in net cash as of Dec. 31, compared with A$391 million a year prior. If there's no use for the cash, executives say they would look to do a shareholder return as the company has done previously--though management is happy to sit on the cash for the next six months. (mike.cherney@wsj.com; @Mike_Cherney)

0103 GMT - Dark clouds are gathering for miners, which are underperforming the broader market and commodity prices significantly, Jefferies analysts say in a note. They reckon it's because of two reasons. "The first dark cloud is growing concerns about the Chinese property markets and Chinese economy," the say. The second: Concerns about non-residential construction outside of China. "The problem, in each case, is that things are more likely to get worse before they get better," the analysts say. Australia's materials index is down by 7.8% in the year to date, versus a 0.6% gain in the S&P/ASX 200. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0047 GMT - Nido Education's debt refinancing gives the early education provider sufficient funding to execute its acquisition pipeline through FY 2026, Wilsons analyst Ben Wilson tells clients in a note. Wilson writes that Nido's decision to centralize its borrowing with a single lender simplifies its debt stack and also releases A$9.9 million held in rental bonds. He sees the refinancing reducing risk and reckons that more material catalysts are probably on the way, flagging potential for Nido to outperform its FY 2024 prospectus forecasts on occupancy and acquisitions. Wilsons raises its target price 6.8% to A$1.41 and stays overweight on the stock, which is down 2.0% at A$0.965. (stuart.condie@wsj.com)

0018 GMT - Pro Medicus gets a new bull at Macquarie, where analysts see the healthcare imaging software provider increasing its share of the U.S. market to 25% by FY 2035. The analysts tell clients in a note that the market is assuming only a 20% market share by FY 2035. They reckon that the Australia-listed company's current contracted revenue implies a 7% market share in FY 2025. With customer feedback suggesting that Pro Medicus's Visage 7 software is faster and more efficient than that offered by rivals, they see that share hitting 15% by FY 2030 and continuing to rise. Macquarie initiates coverage of the stock with an outperform rating and A$120.00 target price. Shares are up 1.7% at A$108.57. (stuart.condie@wsj.com)

0014 GMT - Aurizon served up a muted 1H result on the whole, with guidance maintained despite an earnings beat versus consensus, Citi analyst Samuel Seow says in a note. " Volumes/utilization disappointed in 1H24, and now management expect some revenue yield reversal impacting price," says Seow. On the positive side, the interim dividend from the freight rail company was sharply higher and Aurizon's balance sheet looks better, "implying yield may increase sooner than expected," he says. ( rhiannon.hoyle@wsj.com ; @RhiannonHoyle)

0008 GMT - Cochlear is unlikely to maintain the current pace of growth in sales of its hearing implants, Morgans analyst Derek Jellinek says. He tells clients in a note that improving clinical capacity and an ongoing catch-up in surgeries delayed by Covid-era restrictions are probably drivers of stronger-than-expected 1H unit growth. He points out that 14% 1H unit growth was slower than the 17% recorded in 2H of the prior fiscal year. Jellinek sees sales normalizing as the impact of Covid-related gains fade away and the on-year impact of Cochlear's N8 sound processor launch eases. Morgans raises the stock's target price 7.8% to A$290.50 but cuts its recommendation to hold from add. Shares are down 0.3% at A$321.63. (stuart.condie@wsj.com)

2337 GMT - ANZ's 1Q FY 2024 market update looks devoid of market-moving news, say Citi analysts in a note. They call out the fact that 1Q group revenue was in-line with the 1H FY 2023 quarterly average, and while this was "slightly better" than Citi was expecting, the analysts think this is likely due to better markets revenues. Generally, Citi reckons 1Q result will be received by the market as an in-linedisclosure given the share price rally into the result and generally benign financials. "We think the market will be unlikely to capitalize better markets revenues or an asset quality beat at this point in the cycle, with an anticipated deterioration in asset quality," says Citi. ANZ rises 0.9% to A$29.94. (alice.uribe@wsj.com)

Even though Bendigo and Adelaide Bank is focusing more on cost management and has a quality deposit franchise, risks to margins in its upcoming 1H result remain, Morgan Stanley analysts say in a note. While the MS analysts don't expect specific 2H FY 2024 margin guidance, they reckon broad outlook commentary will remain cautious even as newly acquired mortgage discounting eases. The analysts forecast a 1H cash profit of A$260 million, down 8% half-on-half, with a 12 basis-point contraction in margins. The regional Australian bank is expected to report a roughly 11.4% CET1 ratio and an interim dividend around 32 Australian cents, say the analysts. They raise their target price by 6.1% to A$10.40, and remain overweight on the stock. Bendigo is up 0.1% at A$9.76. (alice.uribe@wsj.com)

RBC Capital Markets analyst Craig Wong-Pan says investors in CSL will likely be disappointed with the results of the Phase 3 study of prospective cardiovascular drug CSL112, which the Australia-based pharma company said did not meet its primary efficacy endpoint. Wong-Pan says RBC Capital Markets did not ascribe any value for CSL112 in its forecasts, but that investors probably thought the drug would be commercialized given CSL's hefty spend on developing and testing. It also set up manufacturing facilities for production, he adds. A silver lining: the production lines could largely be repurposed, so Wong-Pan doesn't expect any material asset impairments. (mike.cherney@wsj.com; @Mike_Cherney)

2308 GMT - CAR Group shares could underperform after the vehicle classifieds provider maintained rather than upgraded its annual guidance, Citi analyst Siraj Ahmed says. He writes in a note to clients that the absence of a positive surprise means the stock may struggle to hold on to gains made in recent months. Shares in CAR rose 51% in 2023 and are up 7.5% so far in 2024. CAR's 1H revenue was stronger than the market had expected, but Ebitda margins were weaker, Ahmed adds. Citi has a last published neutral rating and A$34.30 target price on the stock, which is up 1.6% at A$34.01. in early trade. (stuart.condie@wsj.com)

2300 GMT - CAR Group's earnings growth is tracking ahead of market expectations for the vehicle classifieds provider's fiscal 2024 results, E&P Capital analyst Entcho Raykovski writes in a note to clients. While Raykovski does not say whether he thinks CAR's pro-forma guidance for "good" annual Ebitda growth is conservative, he points out that 1H growth of 19% is stronger than the 16% anticipated by the market prior to Monday's 1H results announcement. CAR's 1H result was largely as expected by analysts and the stock should trade in line with the broader market, he adds. E&P has a positive recommendation and A$32.50 target price on the stock, which is at A$33.47 ahead of the open. (stuart.condie@wsj.com)

Although JB Hi-Fi reported a stronger-than-expected half-year result and positive January trading, E&P analyst Phillip Kimber warns that the outlook for the Aussie electronics retailer's shares isn't as rosy. The stock is already up 22% since a strong Black Friday weekend, and Kimber notes that the shares typically retrace some of its pre-result performance in the ensuing months. The result does highlight JB Hi-Fi's good performance in tough operating conditions, but Kimber says general data points show that the consumer electronics category remains challenging. (mike.cherney@wsj.com; @Mike_Cherney)

2133 GMT - Macquarie may provide conservative FY 2025 guidance, with deal-related activity likely to remain low as sharp rate cuts don't look imminent, say Citi analysts in a note. The investment bank reckons this may challenge the stock's recent re-rating. Ahead of Macquarie's 3Q update Tuesday, Citi notes that despite weaker-than-expected 1H results, the stock has seen a substantial rally, similar to last year's rally heading to 3Q. Still, the stock later retraced on a "less-than-stellar earnings" outlook for FY 2024, Citi notes, wondering if the same could happen again this year. "All eyes will be on deal related revenue divisions of Macquarie Asset Management and Macquarie Capital, where consensus is expecting a significant increase in profits," adds Citi. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

February 11, 2024 22:58 ET (03:58 GMT)