2349 GMT - The reason for Qantas's historically poor 1H cost-to-revenue performance isn't clear to Jarden's analysts. They say that the differential between 1H declines in revenue-per-average-seat-kilometer, or RASK, and cost-of-average-seat-kilometer, or CASK, was the Australian airline's worst other than during the Covid-19 pandemic. RASK fell 11% on year but CASK fell just 6%, they tell clients in a note. The analysts can't say whether this was due to a deliberate strategy of managing profitability or changes to company management of its unit revenue/cost environment. Jarden keeps a buy rating and A$7.00 target price on the stock, which is up 0.7% at A$5.145. (stuart.condie@wsj.com)

2346 GMT - Australian wealth platform Hub24 has made Morgan Stanley's list of small/mid-cap ideas where the investment bank has conviction on earnings. In a note MS says Hub24 makes the list because its been "very successful" at disrupting incumbent platforms, alongside its rival Netwealth. Also supportive for Hub24 has been its pure play model, strong value proposition, and tailwinds from regulation. "We think these structural tailwinds will continue, allowing Hub24 and Netwealth to continue expanding market share," MS says. It has a preference for the former in the near term and the latter in the long-term. Hub24 has delivered stronger net inflows over the last 12 months versus Netwealth, MS notes. It has an overweight rating on Hub24. (alice.uribe@wsj.com)

2340 GMT - Citi says it was too optimistic about the outlook for junior raisings after three consecutive months of more than US$1 billion/month at the back end of 2023. In 2024, however, raisings have sharply deteriorated, leading Citi to rethink its view around the timing of a meaningful recovery. "Our industry feedback has hinted that this could potentially be pushed out to the end of 2024," analyst William Park says in a note. "Nevertheless, Imdex should see reversion of organic instrumentation volume growth as 2H represents a period of easier comps, especially with ramp up from majors." Citi retains a buy call on Imdex. (david.winning@wsj.com; @dwinningWSJ)

2335 GMT - Strong passenger traffic through Auckland International Airport has deepened Citi's confidence that the company can beat FY 2024 earnings guidance. International traffic, including transits, were up 33% on year in February, while domestic passengers increased by 20%. "The strong traffic growth in January and February indicates potential upside to FY 2024 underlying net profit guidance of NZ$260 million-NZ$280 million," analyst Suraj Nebhani says in a note. Citi, which recently upgraded Auckland International Airport's stock to buy, expects an annual profit of NZ$291 million. (david.winning@wsj.com; @dwinningWSJ)

2332 GMT - TechnologyOne should be able to maintain net revenue retention at around 115% or higher despite the weakening of a key tailwind, Bell Potter analyst Chris Savage writes in a note. Savage tells clients that he isn't worried about the impact of the software provider having largely completed its so-called software-as-a-service flips, which led to customers paying about twice what they had been previously. He points out that SaaS customers tend to take on more products, suggesting that product penetration should be the main driver of increased revenue per customer. Bell Potter raises its target price by 7.2% to A$18.50/share and lifts its recommendation to buy, from hold. Shares are up 0.7% at A$16.61. (stuart.condie@wsj.com)

2317 GMT - Jefferies thinks Aurelia Metals will likely defer the development of its Great Cobar project, given it is increasingly confident that exploration close to its Peak mine will turn up new ore for its mill. That has implications for the use of a US$24 million loan note, according to analyst Daniel Roden. The Peak mine currently has a mine life of some three years, but near-mine exploration could extend that and allow for Great Cobar to be developed later. "We currently see strengthening cash flows from Peak, supported by a targeted A$100/ton mining unit cost to fund the Great Cobar development in FY 2027 without the Loan Note being drawn," Jefferies says. (david.winning@wsj.com; @dwinningWSJ)

2306 GMT - EML's sale of its Sentenial business returns the payments provider to its core operations, Wilsons analysts write in a note. Shorn of its distracting non-core units, the Australia-listed company should now be able to allocate capital to improve performance of its remaining assets, Wilsons says. It warns that EML needs to raise the quality of its earnings, which currently benefit from interest income on elevated rates. Wilsons is reviewing its overweight rating and A$1.17 target price on the stock, which is at A$1.26 ahead of the open. (stuart.condie@wsj.com)

2225 GMT - Iress could sell more assets following a deal for its platforms and mortgage-servicing units, Wilsons analysts say. They think that the Australia-listed financial software provider could look at offloading its sourcing business, while its South African and Canadian operations could also offer potential options. They write in a note to clients that Iress could lower its 2024 adjusted Ebitda guidance on completion of the platforms and mortgage-servicing sales to about A$110 million-A$120 million, from A$127 million-A$137 million. This excludes the impact of any first-half headwinds, they add. Wilsons lifts its target price by 13% to A$9.00 and keeps a market-weight rating on the stock, which is at A$8.58 ahead of the open. (stuart.condie@wsj.com)

2202 GMT - Reserve Bank of Australia Gov. Michele Bullock will preside over the first fully staffed policy meeting since September this week, with the central bank expected to diverge little from the mild tightening bias it put forward in early February. Economists expect the RBA will avoid moving to a neutral bias because markets will price in interest rate cuts more aggressively, which would have the effect of loosening monetary conditions prematurely. For bond markets, the meeting should have little impact on yields. (james.glynn@wsj.com; @JamesGlynnWSJ)

2141 GMT - Australian asset manager Perpetual's strategic review is likely either to close a big valuation discount or make it more of an M&A target, says Bell Potter. In a note, analyst Marcus Barnard says Perpetual's Corporate Trust and Wealth Management assets appear particularly valuable right now. Following Perpetual's 1H result, its EPS forecasts rise by 1% for FY 2024 but fall by 2% for FY 2025. At the same time, Bell Potter cuts its target price by 0.7% to A$27.15/share. Perpetual ended last week at A$24.28. (alice.uribe@wsj.com)

2139 GMT - Competition in the Australian banking sector is shifting to business lending in a bigger way, Citi analysts say in a note. There's already strong competition to provide loans to small businesses, it says. But several lenders want to intensify this, which risks squeezing returns. Citi keeps sell calls on Commonwealth Bank and NAB, which it believes could find it harder to maintain their volume success if competition intensifies. For Judo, a small to medium business specialist lender, Citi continues to think its growth aspirations are too ambitious as they are based on maintaining loan spreads. It retains a sell recommendation on Judo. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

March 18, 2024 00:35 ET (04:35 GMT)