2339 GMT - Webjet's superior ability to turn visitors into customers is not fully appreciated by investors, UBS analyst Tim Plumbe says. Already bullish on the stock, Plumbe tells clients in a note that the Australian travel agent's ability to customize user experience through technology, big data and AI could drive material sales growth. This could be well in excess of current market expectations, he adds. Webjet's latest strategy day, which was centered on its hotel marketplace business, improves Plumbe's confidence in the company's competitive advantage. He lifts its target price 17% to A$10.00 after rolling forward his valuation and incorporating stronger long-term forecasts. Shares are up 0.7% at A$8.80. (stuart.condie@wsj.com)

2324 GMT - Scrap metal recycler Sims's U.K. metals business is likely to fetch a higher price than its A$243 million book value, UBS analyst Lee Power says in a note. Sims said in November that it will consider selling its U.K. metals business following expressions of interest from potential buyers. The U.K. unit comprises 28 facilities and four shredders that process more than 1.4 million metric tons of scrap metal a year. "We continue to expect the U.K. metals business to be sold as part of a strategic review," says UBS, which upgrades Sims to buy from neutral. (david.winning@wsj.com; @dwinningWSJ)

2319 GMT - Headwinds are turning to tailwinds for scrap metal recycler Sims, says UBS, which upgrades the stock to buy from neutral. In a note, analyst Lee Power says Sims's earnings are set to recover from a tough 1H yet the stock is only trading at 90-95% of its book value. Sims is also likely to get more traction as it shifts away from low-margin dealer-sourced volumes while simultaneously locking in more domestic buyers, UBS says. "In the short term, we believe continued cost-out should provide some support while leadership changes could incentivize performance," UBS says. "The recent run in primary non-ferrous pricing likely also supports earnings with Sims benefiting from a series of acquisitions in recent years." (david.winning@wsj.com; @dwinningWSJ)

2313 GMT - Macquarie analysts are waiting on a more attractive entry point for Fisher & Paykel Healthcare despite a favorable medium- to long-term outlook for the medical-device maker. Fisher & Paykel raised its annual profit guidance amid strength in demand for hospital consumables. The analysts tell clients in a note that there are positive signs of improved device utilization, but stay neutral on the stock, which they point out is trading at almost 48 times EPS on a 12-month forward basis. Macquarie's target price rises 7.2% to NZ$26.15. Shares are up 1.1% at NZ$26.33, and on course for a fifth straight gain. (stuart.condie@wsj.com)

2311 GMT - Asset quality and earnings at Australia's major banks are likely to face headwinds this year as the full impact of rate hikes are felt by borrowers, says Fitch Ratings in a note. But it reckons any weakness in asset quality should be manageable due to Fitch's expectation that unemployment in Australia and NZ will remain at or below the average of the last decade through 2025. Still, it sees major bank net interest margins staying under pressure due to rising funding costs and loan competition in a slow growth environment, while impairment charges are likely to increase and investment costs will remain high during 2024. "Some of these pressures should ease into 2025, although interest rate cuts may add to the pressure on net interest margins," says Fitch. (alice.uribe@wsj.com)

2300 GMT - Webjet is likely to use its FY 2024 results announcement to release its capital-management policy, with further acquisitions potentially on the cards, Morgans analyst Belinda Moore writes in a note. She tells clients the strength of the Australian company's balance sheet should support capital management and M&A Activity. Moore reckons that Webjet is a markedly better business than prior to the Covid-19 pandemic, and says that its hotel-marketplace unit has a better organic growth profile and higher Ebitda margin than any other travel company covered by the broker. Morgans lifts its target price by 21% to A$10.33 and keeps an add rating on the stock, which is at A$8.74 ahead of the open. (stuart.condie@wsj.com)

2222 GMT - Santos and Carnarvon Energy can take advantage of floating production storage and offloading units currently idled around the world to improve the economics of their Dorado oil project, Macquarie says. It says there are several non-producing FPSOs available that could be modified and reassigned to the Dorado project. "This could allow for first production within 18 months of FID," says Macquarie. That suggests deployment by late-2026 at Dorado. "A redeployed FPSO may result in lower production capacity, however could reduce up-front capex by 15-50%," which would please Santos investors and improve the project's internal rate of return, Macquarie says. (david.winning@wsj.com; @dwinningWSJ)

2215 GMT - Bendigo and Adelaide Bank's sale of its shareholding in Homesafe Solutions will lead to a slow release of capital, say Citi analysts in a note. They estimate there's around A$400 million of CET1 capital associated with Homesafe, which will be released over some eight years as the portfolio runs off. "We think this could form the basis for an elongated capital release plan, with potentially a series of special dividends used to release franking credits," says Citi. Despite viewing Bendigo's balance sheet as being in good shape, Citi has a sell call on the stock to macro concerns. Still, it prefers Bendigo over rivals Bank of Queensland and Judo. (alice.uribe@wsj.com)

2156 GMT - Jefferies thinks production from South32's Gemco manganese operation in Australia could be delayed by 12 months due to damage caused by Tropical Cyclone Megan. It also estimates recovery capital cost of up to US$150 million, of which around US$90 million will be shouldered by South32. Still, it doesn't think the operation is at risk. "Given the remaining mine life of six years (assuming permitting is gained for the Southern Lease Mining Project), we believe it likely that operations will resume at Gemco in the near term," analyst Mitch Ryan says in a note. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

March 25, 2024 00:00 ET (04:00 GMT)