0400 GMT - Price growth at Brambles's U.S. pallet business could be close to zero by the end of the company's FY 2024, Citi analyst Samuel Seow suggests. He points out in a note to clients that annual revenue guidance of 6%-8% growth implies 2H growth of about 4% at the midpoint. Given that 1H revenue growth in Europe, Middle East and Africa outstripped that in the U.S. by about 200 bps--and that volume growth is expected to contribute to revenue growth--he thinks that this implies price growth in the U.S. could exit FY 2024 almost flat. Citi raises its target price 8.4% to A$14.25 on improved revenue and Ebit forecasts, and keeps a sell rating on the stock. Shares are down 3.8% at A$14.69. (stuart.condie@wsj.com)

0353 GMT - Pallet supplier Brambles is trading near value given the uncertain global macroeconomic outlook, Morgans analyst Alexander Lu says. Lu acknowledges Brambles's strong market position and proven ability to pass on costs to customers and also approves of its continued extraction of productivity benefits. Yet he tells clients in a note that the underlying consumer demand environment in the U.S. and Europe remains weak and reckons that its ability to raise prices is moderating as inflation tapers. Morgans lifts the target price 4.7% to A$15.65 and keeps a hold rating on the stock, which is down 3.8% at A$14.69. (stuart.condie@wsj.com)

0346 GMT - Morgans analyst Derek Jellinek remains cautious on Ansell, despite the protective-garment manufacturer's expectations of an improved fiscal second-half performance. Jellinek tells clients in a note that it is reasonable to expect benefits from Ansell's cost-reduction program, but points out that the company is also reliant on external factors including a supportive macro environment and limited levels of customer destocking. Morgans raises its target price by 5.6% to A$22.53 and stays neutral on the stock, which is trading ex-dividend and up 0.4% at A$24.75. (stuart.condie@wsj.com)

0110 GMT - Endeavour's valuation of its freehold property portfolio is bigger than Jefferies had expected. Endeavour says that is accelerating plans to unlock value from the portfolio, which it says is worth more than A$1 billion. "This is well above the circa A$650 million book value," analyst Michael Simotas says in a note. "We had previously estimated the value at A$750 million-A$900 million based on a current use basis, but this valuation likely includes development upside." (david.winning@wsj.com; @dwinningWSJ)

0044 GMT - Aussie Broadband's all-stock offer for Superloop catches Jefferies by surprise. That's because Aussie Broadband has yet to close its earlier bid for Symbio. Still, analyst John Campbell says it's not an unusual tactic, noting that ASX-listed Uniti pulled off something similar with great success. Aussie Broadband is offering 0.21 of its own stock for each Superloop share, which implies a total value of A$0.95/share for Superloop. "Our preliminary work suggests this will be high single digit EPS accretive," Jefferies says. "At only an 8% premium however, we suspect Aussie Broadband may have to go higher." Investors appear to agree: Superloop is up 12% at A$0.98. (david.winning@wsj.com; @dwinningWSJ)

0042 GMT - TPG Telecom's annual net profit fell short of Jarden analyst Tom Beadle's forecast on materially higher finance costs and its impairment of its Internode brand. Beadle tells clients in a note that he expected interest costs to rise in 2023 but is surprised by the magnitude of the increase. TPG's 2024 Ebitda guidance also looks lower than the market was expecting, Beadle adds. He is more positive on TPG's 4% on-half rise in 2H underlying average revenue per post-paid user. Jarden has a last-published buy rating and A$5.80 target price on the stock, which is down 8.8% at A$4.89. (stuart.condie@wsj.com)

0041 GMT - Lynas Rare Earths's 1H result does nothing to change Jefferies's bullish view of the stock. Lynas's A$39.5 million 1H net profit was more than double the bank's A$16 million forecast, illustrating good cost control. In a note, analyst Chris Drew says rare earths markets are stabilizing as demand catches up with supply growth of recent years. "We see some early positive signs," says Jefferies, pointing to improved concentrate prices in China, a significantly reduced rate of production growth in Chinese quotas, and recent feedstock supply deals struck in the industry. "We look for stronger prices as we move through 2024, as well as progress with its extensive range of growth projects, to support Lynas," Jefferies says. Lynas is up 3.9% to A$6.07. (david.winning@wsj.com; @dwinningWSJ)

0033 GMT - Alcoa's A$3.5 billion offer for Alumina doesn't overly impress Citi. Alcoa is offering 0.02854 of its own stock for each Alumina share, representing a 13% premium to Alumina's Friday closing share price. Citi says Australian investors will need to consider giving up franked dividends for Alcoa dividends. In a note, analyst Paul McTaggart says they also need to weigh long-term liquidity levels within an Alcoa Australian CDI and consider swapping out an alumina exposure for a different aluminium/alumina exposure and at what price they'd be willing to do this. "To us, this looks to be a less than generous offer which has been able to garner board support, raising the question as to what the board's baseline assumptions are for the Western Australia assets?" Citi says. (david.winning@wsj.com; @dwinningWSJ)

0033 GMT - Finding investment opportunities and attracting third-party capital are key to success if Goodman Property Trust switches to an internal-management model, says Jarden. Goodman Property Trust wants to take over management from Goodman Group, which will remain a major shareholder. In a note, analyst Lou Pirenc says bears may argue that the opportunity in New Zealand is much smaller than that for Goodman Group over the past few decades. For the bulls, there is a A$1 billion development pipeline, scope for more motivated sellers in a tough capital market and the long-term opportunity of data centers. "We believe the opportunity looks attractive and that it is now up to Goodman Property Trust management to execute, with ongoing support from its partner and largest shareholder," Jarden says. (david.winning@wsj.com; @dwinningWSJ)

2344 GMT - Suncorp's 1H FY 2024 was a significant earnings miss overall, with a small beat in the Australian insurance unit offset by weak earnings in New Zealand and the company's bank, say UBS analysts Scott Russell and Shreyas Patel in a note. They attribute soft bank earnings partly to the net interest margin of 180 bps, which was a miss compared with UBS estimates of 181 bps. "Market likely to look through the bank miss as these earnings are likely sold to ANZ mid-year,' says UBS. For Australian general insurance, gross written premium growth of 16% was a beat compared to UBS's estimate of 11%, which the investment bank deems to be "very strong," seeing an increase in FY guidance, UBS notes. (alice.uribe@wsj.com)

2335 GMT - NIB reported a 1H FY 2024 earnings and dividend beat, but UBS analysts see some issues for the market to work through to assess the result's quality. In a note UBS flags that underlying operating profit for 1H was 13% ahead of consensus due to its Australian Residents Health Insurance unit's net margin. UBS analysts reckon this appears "somewhat low quality." While ARHI's policy growth slowed to 3.7% compared with UBS's estimates of 4.4%, the investment bank notes that guidance of 3%-4% growth for FY 2024 was maintained. "ARHI net margin 9.7% included a reserve release and near-term guidance is a little unclear," UBS says.(alice.uribe@wsj.com)

2331 GMT - NIB's beat for its underlying operating profit line for 1H FY 2024 was driven by an elevated Australian Residents Health Insurance unit's net margin, say Barrenjoey analysts in a note. They reckon this is likely to keep going in 2H which should support consensus upgrades. Barrenjoey notes that NIB reported its 1H results differently to what was previously disclosed, so reconciliation is proving difficult at first look. It notes that the Australian private health insurer declared an interim dividend of 15 Australian cents a share which is 6% above Barrenjoey and consensus. (alice.uribe@wsj.com)

2054 GMT - The more than 12% drop in military shipbuilder Austal's share price on Friday after its 1H result creates an opportunity for investors, says Euroz Hartleys. Austal's 1H result was broadly in line with analyst Gavin Allen's expectations in what he described as a year of transition. At the same time, Austal has a record order book of some A$13 billion, assuming all options are exercised. "We put the sell off down to provision release and growth working capital and infrastructure (and associated funding) requirements," Euroz Hartleys says. "As these are addressed focus returns to the longer term opportunities which are considerable." (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

February 25, 2024 23:01 ET (04:01 GMT)