0224 GMT - ANZ's 1Q FY 2024 update on face value seems to suggest over 5% upside to expected 1H FY 2024 earnings, say Jarden analysts Carlos Cacho and Jeff Cai in a note. But seeing as it's been driven by better markets income, and lower bad and doubtful debts, Jarden is not convinced it will be fully sustainable. It notes the 1Q BDD charge of A$53 million is run-rating well below 1H FY 2024 estimates. Revenue is tracking "in line" with the 1H FY 2023 average, implying an around 3% beat to Visible Alpha consensus, it says. Jarden raises its target price 1.5% to A$26.70 but keeps its neutral call. Shares are up 1.0% to A$28.33. (alice.uribe@wsj.com)

0150 GMT - CSL flagged at its half-year results that it has dampened its near-term growth aspirations for its iron-deficiency and nephrology business Vifor, but management says the business still has longer-term promise. When asked on an analyst call whether the unit--which CSL acquired in 2022--still holds the same value for CSL as when it was bought, executives said yes. "We are really proud of what we've been able to do with integrating the company in and achieving above and beyond on our synergy targets," CSL CEO Paul McKenzie says. "Our strategic vision remains compelling although the timing of the entire ecosystem will take longer than we had envisioned." (mike.cherney@wsj.com; @Mike_Cherney)

0038 GMT - Analysts at UBS say CSL's half-year results included a beat for immunoglobulin sales and decreasing plasma donor costs, but that tempered near-term expectations for iron-deficiency and nephrology unit Vifor could "take the shine off to an extent." Revenue and underlying profit figures were in line with expectations, while underlying gross margin was ahead of consensus, says UBS, which is bullish on CSL. Overall, UBS says the results were in line with expectations. But investors appear a bit pessimistic, as CSL shares were down about 3.6% in recent trade at A$279.60. (mike.cherney@wsj.com; @Mike_Cherney)

0023 GMT - Headwinds to Synlait Milk's profit likely aren't contained to 1H, says Forsyth Barr. Synlait yesterday forecast 1H net loss of NZ$17 million-NZ$21 million, which analyst Matt Montgomerie thinks reflects costs and margin pressures rather than a step change in demand from key customers. Forsyth Barr notes that recent data for a2 Milk, Synlait's top customer, remain robust. Synlait says it has faced higher costs and lower margins for Ingredients and Advanced Nutrition products. "This is consistent with comments provided in late December and trends over the past few years, with the core issue being a lack of fixed cost recoveries as Synlait's asset base remains significantly underutilized (particularly Pokeno)," Forsyth Barr says. It expects Advanced Nutritions margins will remain depressed unless there is a step change in Synlait's volume backdrop. (david.winning@wsj.com; @dwinningWSJ)

0006 GMT - Investors may like Challenger's guidance that it will finish FY 2024 in the top half of its guidance range, Citi analysts say in a note. Challenger reiterated guidance of FY 2024 normalized profit before tax of A$555 million-A$605 million. "Despite the largely in-line first half, it now expects to be in the top half of the range," says Citi. The investment bank says this compares to its current forecasts which, on an equivalent basis, lie only just inside the top half of the range. "The guidance seems to be based on continued momentum in Life as well as an improved 2H for Funds Management." Still, Citi says 1H results aren't quite as good as they seemed at first, noting that statutory profit is below consensus. Challenger stock was recently up 8.4%. (alice.uribe@wsj.com)

2358 GMT - Scentre's 2H dividend appears to point to the Australian mall owner achieving the top end of its annual funds from operations guidance, rather than the bottom end, says Morgan Stanley. Scentre intends to pay a dividend of 8.35 Australian cents/share for 2H of FY 2023. That will bring the annual payout to 16.6 cents, which is above guidance for at least 16.5 cents and ahead of consensus hopes for 16.55 cents, MS says. "While the company would have endured higher average cost of debt in the 2H, it would have continued to benefit from its CPI-linked increases across its specialty leases," with few exceptions, analyst Simon Chan says in a note. (david.winning@wsj.com; @dwinningWSJ)

2350 GMT - Charter Hall Social Infrastructure REIT continues to look expensive to Jarden, even though its net tangible assets look reasonably well underpinned. The REIT sold assets worth A$22.3 million at an 8.8% premium to book value in 1H, and Jarden says a 4.6% weighted average cap rate adds support to its valuation. "The shares looks cheap at a 27% discount to net tangible assets," analyst Lou Pirenc says in a note. "But rising weighted average cost of debt as hedges roll off will likely limit 3-year funds-from-operations compound annual growth rate and the 5.7% dividend yield is slightly below the average for passive REITs." Jarden retains an underweight call. (david.winning@wsj.com; @dwinningWSJ)

2345 GMT - Macquarie 3Q FY 2024 trading update was weaker than expected, with consensus downgrades now likely, says UBS analyst John Storey in a note. The commentary around the divisional performance in 3Q"reads poorly across the board," with overall update run-rating below Visible Alpha consensus for 2H FY 2024, Storey says. "On UBS estimates we back out a rough 3Q FY 2024 net profit after tax number which suggests a sizable 4Q FY 2024 result is needed to deliver against consensus." The lower 3Q result appears consistent with the Group's reports for 1H FY 2024, with Macquarie Asset Management still waiting on the completion of a number of transactions in 4Q, so "still some work needed," he adds.(alice.uribe@wsj.com)

2334 GMT - Challenger's 1H FY 2024 result reflects the "value-enhancing" shift in the company's annuity book toward longer duration products which deliver higher spread margins, Jarden analysts Kieren Chidgey and Dan Bounpraseuth say in a note. For the 1H, Challenger's normalized net profit after tax of A$201 million was 2.8% ahead of Jarden estimates, and 0.4% ahead of consensus, which Jarden said largely reflects stronger Life unit spread margins. Jarden reckons that annuity sales composition in 1H continues should support further mix-based margin expansion ahead, alongside improved net book growth as maturity rates slow. Jarden has an overweight call on the stock. (alice.uribe@wsj.com)

2334 GMT - Challenger's 1H FY 2024 was a modest earnings and dividend beat, say UBS analysts Scott Russell and Shreyas Patel in a note. Even though Life unit annuity sales are below UBS's expectations, the market is likely to take heart from the improving return on equity and cost of equity margin. UBS says its first impression of the result is positive, with FY 2024 guidance lifting slightly. It has a neutral call on the stock.(alice.uribe@wsj.com)

2334 GMT - James Hardie served up an overall strong result, but its 4Q profit guidance of US$165 million to US$185 million is below the US$187 million consensus forecast, Citi analyst Samuel Seow says in a note. Seow reckons guidance has been weighed by higher reinvestment into the business. "Subsequently, we await for more colour on the likely returns," he says. James Hardie is down 6.9% at A$55.10/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2329 GMT - James Hardie's 3Q adjusted Ebit was a slight beat on RBC Capital Markets' expectations, although in line with consensus, the broker's analysts say in a note. The building materials supplier reported adjusted Ebit of US$234.1 million, ahead of RBC's US$229 million forecast but in line with FactSet consensus of US$234 million. Adjusted EPS of US$0.41 was slightly above RBC's forecast of US$0.39 and in line with FactSet consensus at US$0.41, they add. James Hardie is down by 3.4% early in Sydney, at A$57.17/share. RBC analysts have a Sector Perform rating and a A$54.00 target. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2327 GMT - Macquarie may see an around 4% downgrade to consensus expectations for FY 2024 net profit after tax following release of the financial company's 3Q FY 2024 trading update Tuesday, Barrenjoey analysts say in a note. They see that the softer trading update, which reflects current market conditions for M&A activity and asset realizations, is "disappointing." Still, Barrenjoey reckons the deal pipeline still looks strong with the timing of transactions likely to be pushed into FY 2025, meaning the medium-term outlook looks broadly unchanged. "Furthermore, no change to the Commodities & Global Markets outlook despite low volatility and warm weather is likely to be seen positively," Barrenjoey says, adding that Nick O'Kane leaving as Head of CGM is a surprise, and that he is "highly regarded by the market." (alice.uribe@wsj.com)

2257 GMT - ANZ's recent operating results show further evidence of the improving profitability of the Australian major lender's institutional business, Goldman Sachs analysts Andrew Lyons and John Li say in a note. They call out that unit's transaction banking profits have reached an all-time high. "We see further upside risk to ANZ Group returns from mix shifts in its Institutional division," says Goldman Sachs, which keeps a buy call on the stock. ANZ this week issued its 1Q FY 2024 and Pillar 3 disclosure for 1Q FY 2024, which Goldman Sachs says was in line with the 1H FY 2023 quarterly average, with non-markets revenue broadly in line. The investment bank sees that 1Q bad and doubtful debts were better than what was implied by prior 1H FY 2024 forecasts, and adding that asset quality has continued to normalize. (alice.uribe@wsj.com)

2245 GMT - Synlait Milk says it's seeking to shore up its balance sheet as a priority, and Macquarie looks at the company's options if it cannot sell its Dairyworks business. "We think divesting the blending and canning facility at Dunsandel to a2 (the natural buyer given SAMR registration) could be a possible transaction to meet debt repayment timeframe," Macquarie says. SAMR registration gives Synlait the right to make and export a2's Chinese-labelled infant formula to China from the Dunsandel facility. "Selling end-to-end infant manufacturing at Dunsandel could allow for clearing all of Synlait's debt," adds Macquarie. Synlait needs to make a NZ$130 million debt repayment by end-March, with a NZ$180 million subordinated bond also maturing in December. (david.winning@wsj.com; @dwinningWSJ)

2240 GMT - Citi analysts Adrian Lemme and James Wang say sales at Aussie electronics retailer JB Hi-Fi continue to defy expectations, and that momentum is likely to increase in the near future. The retailer posted a better-than-expected half-year result and said that like-for-like sales in January rose 1.7% in its main Australia business, which the Citi analysts called a "pleasing outcome" given fears in the market of a New Year's sales slump. The Citi analysts argue the retailer's earnings will bottom out this fiscal year, and that income tax cuts, solid income growth and further house price appreciation will drive a better consumer spending environment in fiscal 2025. JB Hi-Fi shares rose some 7.1% after Monday's result to A$60.58. (mike.cherney@wsj.com; @Mike_Cherney)

2238 GMT - Macquarie thinks there's room for a deal if Beach Energy wants to buy assets from Santos as part of the bigger company's restructuring. "We expect this could include straight asset purchases, or even something broader," such as Santos taking an in-specie distribution of Beach shares while transferring some assets to Beach, Macquarie says. The bank thinks several of Santos's domestic assets would interest Beach, such as conventional oil and gas fields in the Cooper Basin, natural-gas fields in Western Australia, and Santos's majority owned Dorado oil field. "However clearly the scale is large for Beach," Macquarie says. (david.winning@wsj.com; @dwinningWSJ)

2212 GMT - Janison Education's lower-than-expected 1H free cash outflow helps offset any disappointment at Wilsons over what the broker's analysts see as the early education provider's soft revenue performance. Janison's 1H revenue of A$22.1 million was about 13% lower than Wilsons analysts had anticipated, but they point to diligent working capital management as a positive. They see potential catalysts ahead. Wilsons lifts target price 20% to A$0.36 after rolling forward valuation to FY 2025 and keeps a market-weight rating on the stock, which is at A$0.32 ahead of the open. (stuart.condie@wsj.com)

2200 GMT - Seven West Media shares are likely to underperform the broader market after the media conglomerate's 1H Ebitda fell short of expectations, E&P Capital analyst Entcho Raykovski says. He tells clients in a note that Seven West's 1H Ebitda of A$124 million compared with his forecast of A$137.5 million. He acknowledges the company's statement that the decline in advertising markets is moderating so far in 3Q, but reckons this was already expected by investors and is unlikely to move the dial. E&P has a neutral rating and A$0.30 target price on the stock, which is at A$0.275 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

February 12, 2024 23:11 ET (04:11 GMT)