0359 GMT - Webjet's detailed strategy update has made its longer-term target for its hotel marketplace seem more realistic to investors, Wilsons analyst Ben Wilson writes in a note. He reckons that the information presented at the Australian travel agent's strategy day appears to have lowered perceived risks around its 2030 target for A$10 billion in total transaction value on its WebBeds platform. Wilson tells clients in a note that a strategy based on existing portfolio growth; new customers, supply and markets; and increased conversion looks coherent. Wilsons lifts target price 10% to A$10.13 and stays overweight on the stock, which is down 0.1% at A$8.685. (stuart.condie@wsj.com)

0342 GMT - Brickworks produced a commendable set of fiscal 1H results given the predictable drop in building-products revenue it recorded in both Australia and North America, Jarden analysts write in a note. Revenue in those markets dropped 11% and 2%, respectively, from the year-earlier period, but the Jarden team hails Brickworks' better-than-expected margin management. They say that Brickworks is a well-managed conglomerate, but add that they prefer Boral for pure exposure to improving Australian construction trends. Jarden trims the stock's target price 0.9% to A$28.50 on the devaluation of Brickworks' property assets, but maintains a neutral call. Shares are down 2.1% at A$27.72. (stuart.condie@wsj.com)

0331 GMT - Brickworks loses a bull on the value of its investments rather than its prospects or performance. Bell Potter analyst Sam Brandwood points out in a note to clients that ASX-listed investment house Washington H. Soul Pattinson--in which Brickworks holds a 26% stake--is trading at a 7% premium to what the broker sees as the value of its net tangible assets. Brandwood downgrades his recommendation on Brickworks to buy from hold, but stresses that he remains positive on its significant property pipeline and assets in a supply constrained western Sydney market. Bell Potter raises its target price 4.3% to A$29.00. Shares are down 2.6% at A$27.575. (stuart.condie@wsj.com)

0257 GMT - The a2 Milk Company could beat its full-year revenue guidance if current export trends continue, Citi analysts tell clients in a note. They write that New Zealand port data suggests that momentum in export volumes to Hong Kong continued in January. They reckon that this could suggest further improvement in fiscal 2H sales of a2's English-labeled product, driven by consumers trading down to lower-cost infant formula and the absence of Covid-related obstructions. Export volumes to Australia also appear to have further grown, they add. Citi has a neutral rating and A$5.75 target price on the stock, which is up 0.9% at A$6.195. (stuart.condie@wsj.com)

2349 GMT - There is limited scope for positive surprise or fundamental reasons for a structural re-rating for the Australian bank sector, say Macquarie analysts in a note. It remains underweight, viewing Aussie lenders as being "too expensive to own." The investment bank says fund managers mostly agreed with its views, with investors questioning who was buying banks at current levels. "The bank sector's outperformance since the middle of last year, without clear fundamental reasons, appears to be driven more by technical factors than fundamental ones," says Macquarie. Its analysis shows that banks' outperformance in 4Q 2023 was primarily due to domestic institutional investors buying. Even though data for the March quarter isn't out yet, Macquarie says it understands that foreign investors have been more active recently. (alice.uribe@wsj.com)

2302 GMT - Australian banks look expensive compared with their global peers, which means that the recent domestic bank stock rally is likely overdone, Wilsons Advisory analysts say. They view valuation multiples as having risen significantly to the point that they are now stretched relative to historical norms. Current valuations are also disconnected from fundamentals, Wilsons says. As a result, it reduces its exposure to Australian banks, and cuts it stake in Westpac by 2%. "This takes us underweight the stock and even further underweight the sector." Wilsons reckons there is limited upside to lenders' forward earnings, even with the possibility of a soft landing and interest rate cuts in the next 12 to 18 months. (alice.uribe@wsj.com)

2242 GMT - Brickworks looks fairly priced to Morgans analyst Liam Schofield as the Australian building-materials supplier waits on what it says will be a domestic building boom. Schofield tells clients in a note that management remain sanguine despite the prospect of some short-term weakness in building-product demand, with record immigration central to the company's longer-term confidence. He removes the use of discounted cashfow from his valuation model, as cashflows from property and investments have become less predictable. Based solely on a sum-of-the-parts model, Morgans lifts target price 19% to A$30.00 and keeps a hold rating on the stock. Shares are at A$28.31 ahead of the open. (stuart.condie@wsj.com)

2215 GMT - Citi raises its earnings forecasts for Sigma Pharmaceuticals ahead of its merger with Australia's Chemist Warehouse pharmacy chain. Analyst Mathieu Chevrier increases his Ebit forecast for fiscal 2024 by 4% and for fiscal 2025 by 5% on slightly higher revenue and margin expectations. Looking across privately owned Chemist Warehouse's financial summary, Chevrier tells clients in a note that accounting changes make comparison with the year-earlier period difficult. With Sigma building inventory in preparation to start supplying Chemist Warehouse from July 1, Citi raises target price 13% to A$1.30 and stays neutral on the stock, which is at A$1.23 ahead of the open. (stuart.condie@wsj.com)

2152 GMT - Morgans no longer expects the Chemist Warehouse business to contribute six months' earnings to Sigma Healthcare in FY 2025, following comments by Sigma around the merger's progress. Key to completing the deal is approval by the ACCC, Australia's competition regulator. Sigma expects a decision in 2H of this year, and there are several steps that need to be taken after the ACCC signs off on the deal. "Thus we now view completion of the deal by January 2025," analyst Scott Power says in a note. As a result of delaying the incorporation of the Chemist Warehouse business into its model, Morgans cuts its FY 2025 Ebitda forecast to A$81.4 million, from a prior projection of A$384 million. (david.winning@wsj.com; @dwinningWSJ)

2143 GMT - Webjet's forecast that its WebBeds business can achieve a total transaction value of A$10 billion by FY 2030 was more bullish than Jefferies expected. Webjet's outlook suggests a compound annual growth rate of 15% across FY 2025-2030, well above the rate of around 10% that Jefferies had projected. "Pleasing that TTV growth's all organic," analyst John Campbell says in a note. "No hint that some will be via M&A." Jefferies agrees that small business-to-business players will struggle to maintain their offering, as they lack the technology and global scale. It retains a hold call on Webjet's stock. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

March 22, 2024 00:00 ET (04:00 GMT)