0142 GMT - Premier Investments' 1H performance is seen by Morgan Stanley analysts as supporting their bullish stance on the retail conglomerate even before taking into account its demerger options. The MS analysts raise their retail Ebit forecasts for FY 2024-FY 2026 by 4%-5% on higher sales and margins expectations. The stock is trading at about 16X FY 2025 earnings, which they tell clients in a note looks attractive from a risk/reward perspective. MS lifts the stock's target price 19% to A$38.00 and stays overweight. Successful demergers of its Smiggle and Peter Alexander businesses could unlock further value, they add. Shares are down 2.9% at A$31.06. (stuart.condie@wsj.com)

2342 GMT - Goldman Sachs analysts see a wide potential valuation range for Premier Investments depending on the overseas performance of its Smiggle and Peter Alexander units. In their view, only the most positive outcome results in a valuation in line with the Australian retail group's current share price. The MS analysts write in a note that their so-called high case assumes FY 2027 Ebit of A$43 million for Peter Alexander Global and A$66 million for Smiggle Global. This compares with their base case forecasts of A$4 million and A$54 million, respectively. GS raises its target price 6.8% to A$25.10, in line with its base case. It keeps a sell rating on the stock, which is down 1.7% at A$31.46. (stuart.condie@wsj.com)

2332 GMT - There may be some benefits for Flight Centre and Corporate Travel Management from two American rivals combining, says Citi analyst Samuel Seow. Global Business Travel Group, which operates the American Express Global Business Travel business-travel booking platform, this week agreed to buy CWT in a cash-and-stock deal valued at US$570 million. "With one less competitor, we estimate the industry structure will improve and incrementally, we see this as a minor positive for Flight Centre/Corporate Travel Management and a modest negative for airlines," Seow says. The takeover may lead to regulators forcing asset sales in some regions, which could also be an opportunity for the Australian companies, he adds. (david.winning@wsj.com; @dwinningWSJ)

2319 GMT - A pathway exists for 29Metals to avoid requiring new capital in coming months, says Morgan Stanley, following the miner's decision to suspend operations at Capricorn Copper. In a note, analyst Rahul Anand expects 29Metals will be A$50 million short of capital in 2H, but this could narrow to A$15 million if spot commodity prices remain stable. "As such, if 29Metals were to receive additional insurance payment of A$15 million or a delay on debt repayments achieved or spot copper were to rise another 5% from now, we see 29Metals avoiding additional capital in the 2H," Morgan Stanley says. (david.winning@wsj.com; @dwinningWSJ)

2317 GMT - The early outcome of Premier Investments' strategic review surprises Jarden. Premier said yesterday it plans to spin off stationery store Smiggle by the end of January 2025, and is also exploring a possible demerger of sleepwear business Peter Alexander. In a note, Jarden analyst Ben Gilbert says this will be a costly exercise and not the best option available. "In our view, value could be increased further through demerging apparel," Jarden says. Its price target lifts 20%, to A$30.80/share. Premier is down 0.2%, at A$31.95, today. (david.winning@wsj.com; @dwinningWSJ)

2253 GMT - Brookfield Asset Management's previous investment in New Zealand mobile telecommunications could give a hint at its strategy should it try to buy Australia's Optus from Singapore Telecommunications, E&P Capital analyst Entcho Raykovski says. He points out that, with Brookfield owning a 49.9% interest, Vodafone NZ prioritized profitability and returns over mobile subscriber market share. Raykovski tells clients in a note that the mobile provider grew annual Ebitda from NZ$463 million in FY 2019 to NZ$528 million in FY 2023, a period that largely coincided with Brookfield's stake ownership. This was despite a relatively flat revenue base and the impact of Covid-19, he adds. (stuart.condie@wsj.com)

2147 GMT - Serko's international expansion ambitions could be hindered by Global Business Travel Group's US$570 million acquisition of CWT, Citi analyst Siraj Ahmed says. He says that, while the move is unlikely to impact the software provider's core business in Australia and New Zealand, its U.S. prospects may be hit. Ahmed reminds clients in a note that CWT chose Serko in May 2022 as one of three global preferred online booking tools. He points out that GBT has its own in-house online booking platform. Citi has a buy rating and A$4.90 target price on the stock, which is at A$3.55 ahead of the open. (stuart.condie@wsj.com)

2228 GMT - Alliance Aviation continues to offer compelling value to Wilsons analysts after strong demand prompted the aircraft leasing company to add additional planes to its operating fleet. The analysts tell clients in a note that the addition of the craft will not change the capital commitment associated with Alliance's E190 purchases, but does offers potential for modest earnings upgrades in future years. Earnings associated with the craft should modestly reduce its peak debt-leverage ratio, they add. Wilsons keeps an overweight recommendation and A$4.35 target price on the stock, which is at A$2.90 ahead of the open. (stuart.condie@wsj.com)

2145 GMT - 29Metals likely needs A$200 million of additional funding this year, with another A$100 million in 2025 to meet its debt and stamp duty obligations, says Jefferies. Funding options include insurance payments, extension of an offtake deal for concentrate produced by the Capricorn Copper operation, and raising equity, analyst Mitch Ryan says in a note. "29Metals currently does not have the balance sheet to appropriately capitalize and restart Capricorn Copper without likely dilutive equity solutions," he says. There is a another option: Selling part of Capricorn Copper to a group "with the balance sheet and patience to invest in the asset could insulate 29M's balance sheet," he adds. (david.winning@wsj.com; @dwinningWSJ)

2142 GMT - Monadelphous's newest bull says the engineering contractor's FY 2024 guidance of 10% revenue growth looks conservative. Bell Potter, which starts Monadelphous at buy with a A$15.40/share price target, expects revenue growth of 17%. "Engineering Construction revenue growth is forecast to continue in 2H FY24, with a step-up in construction contracts won in FY 2024 valued at over A$750 million scheduled to be completed over FY 2024-25," analyst Joseph House says in a note. In Maintenance and Industrial Services, Monadelphous's annualized contracts either won or extended in FY 2024 so far are running at a record level, and well ahead of a year ago. Monadelphous ended Tuesday at A$13.80. (david.winning@wsj.com; @dwinningWSJ)

0522 GMT - Positive momentum at CAR Group's South Korean unit has likely continued into the Australian company's fiscal second half, Citi analyst Siraj Ahmed suggests. Ahmed reckons that used-car transaction data and web traffic figures look supportive for the Encar business. He writes in a short note to clients that he sees Encar's annual revenue growth picking up from 13% in 1H to more than 15% in 2H, helped by November's 10% price-rise for standard ads. Citi has a neutral rating and A$34.70 target price on the stock, which closed 2.2% lower at A$35.98. (stuart.condie@wsj.com)

0506 GMT - Breathing-tech provider ResMed still shows value to Wilsons analysts, who expect at most limited implications for continuous positive airway pressure treatments if Eli Lilly announces positive results from its latest weight-loss drug trial. They point out in a note to clients that the inclusion of CPAP machines in the study is intended to enhance the extent to which any findings related to tirzepatide's efficacy can be applied to other situations. It is not intended to be read as a head-to-head comparison, they say. Wilsons stays overweight on the stock and lifts target price 5.2% to A$32.90. Shares are down 1.15% at A$29.33. (stuart.condie@wsj.com)

0444 GMT - IDP Education keeps its bull at UBS despite regulatory uncertainty including in Canada and the U.K. Analyst Tim Plumbe tells clients in a note that the initial disruption on the Australian student-placement provider from policy changes in Canada aren't fully reflected in analysts' FY 2025 forecasts. In January, Canada announced a two-year cap on foreign students. With the U.K. heading for a national election this year, any tightening of student work rights being mulled by the center-left opposition could also have an impact, Plumbe says. Nonetheless, he remains positive on the long-term opportunity. UBS cuts its target price 9.6% to A$25.30 and keeps a buy rating on the stock, which is down 3.5% at A$17.46. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

March 27, 2024 00:00 ET (04:00 GMT)