353 GMT - KMD Brands' track record of earnings misses gives Morgan Stanley analysts little confidence that the outdoor clothing retailer can hit its medium-term targets. The analysts tell clients in a note that this history of missed expectations moves them to lower their valuation multiple to eight times earnings, from 10 previously. MS's target multiple is now at a 30%-40% discount to its five-year average. MS cuts the stock's target price 31% to A$0.55 and keeps an equal-weight rating. Shares are down 0.5% at A$0.4875. (stuart.condie@wsj.com)

0330 GMT - Morgan Stanley analyst James Bales wouldn't be surprised to see Pacific Smiles' shares trade above the improved offer of A$1.75 by private-equity firm Genesis Capital. He points to the fact that the stock had already traded past the A$1.40 previously proposed by Genesis, and that the Australian dentistry provider has granted due diligence on a non-exclusive basis. In a note to clients, Bales also notes that the proposal's implied valuation of 9X fiscal 2024 Ebitda represents a material discount to comparable transactions for lower-quality assets. Shares are down 0.9% at A$1.645. (stuart.condie@wsj.com)

0317 GMT - KMD Brands' recent improvement in sales looks encouraging to Macquarie's analysts, who nonetheless remain cautious on the outdoor clothing retailer. They write in a note to clients that they expect revenue headwinds to remain challenging despite its performance for the six months through June being set to benefit from comparison with a weak prior corresponding period. They cut EPS forecasts for the next three full fiscal years by 20%, 17% and 19%, respectively, but raise the stock's target price 8.5% to A$0.51 on a change in valuation methodology and multiples. Macquarie stays neutral on the stock, which is up 3.9% at A$0.53. (stuart.condie@wsj.com)

2239 GMT - Premier Investments could generate at least A$25 million in potential synergies if it took full control of ASX-listed department-store chain Myer, Citi analyst James Wang writes in a note. He tells clients that the pattern of Premier's share acquisitions suggests it could take control at some point. At such a time, Wang thinks that Premier would probably try to engineer improved sales and margins by replacing underperforming products with its existing higher-margin range. He reckons that this could amount to about 2% of Premier and Myer's combined earnings before interest and tax. There are also potential benefits including from distribution centers, he adds. (stuart.condie@wsj.com)

2223 GMT - Seven's buyout offer for Boral looks dead in the water to Bell Potter. That view was cemented by Boral's directors rejecting the bid and an independent expert report, or IER, concluding the offer was neither fair nor reasonable. The IER valued Boral at A$6.50-A$7.13/share, assessing the value of the company's surplus property at A$1.4 billion-A$1.6 billion. Seven had already declared its offer final at a maximum A$6.39/share. "The prospect of the Seven offer successfully completing is unlikely," analyst Joseph House says in a note. "We expect trading in Boral's shares will reflect its underlying fundamentals, to which our valuation reverts to." Boral ended Tuesday at A$6.33/share. (david.winning@wsj.com; @dwinningWSJ)

2218 GMT - Deep Yellow's decision to go hard early by raising A$250 million of equity to support development of its Tumas uranium project was a smart move, Bell Potter says. That's because it puts the company in a better position to negotiate supply deals with utilities, which will ultimately feed into debt negotiations, analyst Regan Burrows says in a note. Bell Potter estimates Tumas will cost A$657 million to build, meaning Deep Yellow needs to find another A$407 million. "We suspect Deep Yellow will look to source traditional debt for most of the remaining balance," Bell Potter says. "However other options include pre-production sales and as a failsafe option, strategic equity." (david.winning@wsj.com; @dwinningWSJ)

2206 GMT - Mineral Resources' acquisition of Poseidon's Lake Johnston nickel concentrator for A$15 million creates three processing hubs for its lithium assets in the Goldfields region of Australia, Jefferies says. As a result, it will be able to refine material from its Mt Marion and Bald Hill operations that required a functional flotation facility. "More importantly, however, the infrastructure facilitates the treatment of third-party ores from regional stranded deposits, and unlocks regional consolidation potential," analyst Mitch Ryan says in a note. Mineral Resources wants to treat third-party ore in exchange for project-level equity, and would likely seek to apply mining services contracts over those operations, he says. (david.winning@wsj.com; @dwinningWSJ)

2145 GMT - Mining licence delays that curtailed Nickel Industries' ore sales in 1Q are likely to weigh on the company's annual earnings, Jefferies says. Nickel Industries says its Hengjaya mine in Indonesia wasn't able to sell ore in January and most of February. So, Nickel Industries processed more lower-grade ores at its rotary kiln electric furnaces--known as RKEF--that resulted in higher operating costs and lower Ebitda margins. Jefferies cuts its 1Q Ebitda forecast to US$65.2 million. "The RKEF operations are unlikely to regain the lost Ebitda, and as such we see a 15% decrease to our 2024 earnings," analyst Mitch Ryan says in a note.(david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

March 20, 2024 00:02 ET (04:02 GMT)