0346 GMT - Domain's continuing loss of market share to rival real-estate advertiser REA concerns Citi analyst Siraj Ahmed. He says in a note that Domain's 2% on-year drop in residential listings volumes widens the volume gap to REA. Ahmed reckons that Domain's comment that January listings volumes continued to grow in Sydney and Melbourne implies growth at a group level lagged the 12% reported by REA. Domain noted early signs of improvement in other parts of Australia in February, but Ahmed notes that REA showed January volume growth in Brisbane. Citi has a buy rating and A$3.80 target price on Domain shares, which are down 4.9% at A$3.29. REA is 61% owned by News Corp., the owner of Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)
0335 GMT - Computershare's FY earnings target looks achievable to analysts at Citi. They reckon that the share-registry provider's guidance for 7.5% growth in so-called management EPS across the whole of FY 2024 implies 2H management EPS of US$0.608. The Citi analysts tell clients in a note that Computershare's US$0.548 in 1H management EPS was aided by a 3% rise in recurring fee revenues and a recovery in employee share plan and issuer services transactional revenue. Citi has a last-published buy rating and A$29.00 target price on the stock, which is up 4.6% at A$26.20. (stuart.condie@wsj.com)
0316 GMT - Jefferies approves of a decision by Fletcher Building to seek a buyer for its Tradelink Australia business. In a note, analyst Simon Thackray says Tradelink has underperformed, with Fletcher today taking a NZ$122 million impairment charge against the business. "We view this as an incremental positive," even though weakness in the Australian business is more muted than in other segments, Thackray says of the Tradelink sales process. (david.winning@wsj.com; @dwinningWSJ)
0310 GMT - GrainCorp's earnings outlook seems conservative to Jefferies. GrainCorp signaled FY 2024 underlying Ebitda of A$270 million-A$310 million, some 9% below the A$320 million forecast by analyst John Campbell at the midpoint. "Important to note, in the three years since the demerger of United Malt, GrainCorp has materially beaten its AGM Ebitda guidance," he says. "We continue to see improving Winter crop conditions in Australia and remain comfortable with our above top-end forecast." Jefferies retains a buy call on GrainCorp. (david.winning@wsj.com; @dwinningWSJ)
0303 GMT - Temple & Webster secures a new bull at Citi as the Australian furniture retailer continues to show solid near-term momentum. Analyst James Wang upgrades his recommendation to buy from neutral, telling clients in a note that he has become more positive on the online retailer's business fundamentals. He sees strong revenue growth at the start of Temple & Webster's fiscal 2H implying improved conversion rates and expects FY 2025 sales to be supported by income tax cuts, potential interest-rate cuts and a resurgent housing market. He points to the company's greater operational flexibility compared with physical retailers. Citi raises its target price 76% to A$13.00. Shares are up 0.6% at A$11.08. (stuart.condie@wsj.com)
0227 GMT - AMP's FY 2023 earnings were stronger and ahead of consensus and Jarden's estimates, say the investment bank's analysts Kieren Chidgey and Dan Bounpraseuth in a note. Looking ahead, while net interest margin guidance is in line with Jarden's estimate, AMP Bank's loan book ended FY 2023 2% below both Jarden and consensus. For AMP's wealth unit, a more stable revenue margin outlook is positive, it says, countering slightly softer FY 2023 assets under management with 2H FY 2023 net outflows of A$5.8 billion, slightly worse than Jarden's estimates. "More significantly, confirmation that stage 3 capital returns will resume is the key positive," Jarden says. (alice.uribe@wsj.com)
0002 GMT - Gold miner Evolution surprised Ord Minnett with its A$0.02 interim dividend. Analyst Paul Kaner says he hadn't expected a payout given the condition of the company's balance sheet and its need to spend cash on upcoming projects. "Although cash flows should improve significantly in the near-term which should de-lever the balance sheet, even after incorporating our more bearish view on FY24 guidance," says Kaner. On Evolution's 1H report, he adds: "A few moving parts here, but on balance the result looks OK." Underlying Ebitda was higher than Kaner estimated but broadly in line with consensus, while profit was a slight miss, he says. Evolution is down 2.6% at A$2.95. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2351 GMT - Commonwealth Bank's 1H FY 2024look "vanilla" to Barrenjoey analysts Jon Mott and Minh Pham in a note. While it was in-line, says Barrenjoey, there was no guidance provided which leaves little to be debated. "Given the rally over the past three months, we expect this result to be seen as business as usual," says the investment bank, adding that it expects consensus to be broadly unchanged with softer net interest margin offset by higher noninterest income and lower bad debts. CBA falls 3.2% to A$112.36.(alice.uribe@wsj.com)
2341 GMT - AMP's FY 2023 result was a rare earnings beat, though capital management and investment flows will likely disappoint the market, UBS analysts Scott Russell and Shreyas Patel say in a note. AMP's underlying net profit after tax fell by 25% half-on-half in 2H FY 2023, but not as bad as consensus -37%. NPAT in the Bank is in line with UBS forecasts, with AMP guiding for FY 2024 NIM of between 1.10% and 1.15%. At the same time, a final dividend of two Australian cents was ahead of consensus but called out that it represents only A$55 million of the A$350 million Tranche 3 capital and that no further buyback was announced. "All up, further cost reduction may stabilize the earnings outlook somewhat, but our concerns for capital and flows remain," UBS says. (alice.uribe@wsj.com)
2324 GMT - While elements of Commonwealth Bank's 1H FY 2024 earnings were a beat relative to consensus, it's unlikely to support recent share price outperformance, UBS analyst John Storey says in a note. He calls out that CBA delivered around A$5 billion in cash net profit after tax "at a point in time when the bank has endured extreme levels of pricing pressure in mortgages and deposits." UBS reckons that If the mortgage market rationalizes, CBA is "well placed," with management havinga number of levers to pull to regain lost market share. "We think consensus earnings per share likely moves higher, with UBS already +2.5% ahead of the Street," UBS says. (alice.uribe@wsj.com)
2315 GMT - The market is likely to receive Commonwealth Bank's 1H FY 2024 results well, liking its strong balance sheet and growing dividend, Citi analysts say in a note. For the 1H CBA reported cash earnings A$5.02 billion, which was in-line with Citi forecasts, but ahead of consensus. "At face value, the print has the markings of a good result…capital is strong and the dividend is up year-on-year despite falling cash earnings," analysts say. But, they also reckon that it glosses over a deteriorating outlook, calling out declining deposit trends, which indicate the bottom in earnings hasn't yet arrived. Citi tips further net interest margin contraction. "As we have noted in recent weeks, CBA's valuation is difficult to reconcile on any fundamental measure," Citi says. (alice.uribe@wsj.com)
0519 GMT - Macquarie's 3Q trading update highlights a continuation of the slow transaction activity environment, say Citi analysts in a note. They reckon this could challenge the building share price momentum. The company's 3Q disclosure showed year-to-date profit "substantially down" versus the previous year. "This was an inevitable outcome given the extraordinary Commodities and Global Markets profitability in 3Q FY 2023," they say and think it's consistent with Citi's own forecast of 3Q FY 2024 net profit after tax of around A$950 million. "Management have made minor FY 2024 guidance tweaks; however, this is likely to lead to only minor adjustments to estimates," Citi adds. (alice.uribe@wsj.com)
0502 GMT - CAR Group's reinvestment in product features should help the vehicle advertiser increase revenue and deliver improved operating leverage over the next three years, Citi analyst Siraj Ahmed writes in a note. Ahmed tells clients that CAR's 1H cost growth was higher than he had forecast, but says that the driver is the investment that should help the company expand its Australian Ebitda margin to 66.5% by FY 2026, from 64.8% in FY 2023. Suburb-based pricing could help increase yield from private advertisers as volumes decline, he says. Citi stays neutral on the stock and lifts its target price 1.2% to A$34.70. Shares are down 1.8% at A$33.42. (stuart.condie@wsj.com)
(END) Dow Jones Newswires
February 13, 2024 23:01 ET (04:01 GMT)