0108 GMT - Pricing trends across mortgages and deposits at Australian banks remained broadly stable in March, which Macquarie analysts reckon leaves scope for better-than-expected short-term margins in upcoming results. Still, mortgage competition persists, and while wider system growth is stable, banks grew below system levels, says Macquarie. This could mean that non-banks took market share, which has been a recent trend. Apart from ANZ, which is outperforming peers on mortgage growth, trends have converged. CBA, NAB and Westpac are all growing at around 0.7X system, says Macquarie, adding that regional banks' momentum has also picked up. The investment bank stays underweight on the banking sector. (alice.uribe@wsj.com)

0055 GMT - A substantial rise in forecast capex for Regis Resources' McPhillamys gold project could make it uneconomic, says RBC Capital Markets. Regis announced an updated definitive feasibility study that estimates capex of A$960 million-A$1.06 billion to bring the mine into production. That was far higher than RBC's expectation of A$580 million, and the top end of consensus forecasts at A$650 million. Life-of-mine all-in sustaining costs of A$1,600-A$1,800/oz also topped RBC's forecast of A$1,550/oz. "Regis is not obliged to construct McPhillamys, with sustained production likely from other assets: Duketon and Tropicana," says analyst Alex Barkley. "While the McPhillamys project may be deferred at its mid-year final investment decision, it would still offer considerable leverage to a high and rising spot price." (david.winning@wsj.com; @dwinningWSJ)

0050 GMT - Insurer Youi's 1H FY 2024 result is a good reference point for IAG and Suncorp, with supply chain issues and reinsurance renewals continuing to impact risk appetite, say Macquarie analysts in a note.In some key observations about Youi's 1H, Macquarie sees elevated claims inflation in its home insurance line and evidence of increased shopping around across the market. At the same time, pricing and claims inflation is anticipated to be higher for longer. For the 1H Youi's gross written premium growth was 24% for personal lines, compared with around 16% each for Suncorp and IAG. On reinsurance, Youi's program for FY 2024 reflected pricing challenges across the market, Macquarie says. (alice.uribe@wsj.com)

0033 GMT - Australian general insurers are a preferred exposure in the insurance sector, over private health insurers or brokers, say Jarden analysts in a note. General insurers saw investment gains in the March quarter, with earnings likely to be further supported by catastrophe budget beats, they say. This is particularly so for domestic insurers IAG and Suncorp, who are now past their peak exposure period. Still, QBE is Jarden's top pick, with a buy call, due to its 'undemanding' price-earnings ratio. While private health insurers and brokers may deliver solid FY 2024 results, the former may see profitability risks due to greater government scrutiny around pricing, Jarden cautions, while the latter may see moderating commercial premium rates. (alice.uribe@wsj.com)

0013 GMT - Gold Road Resources loses a bull after its strong share-price run, with Macquarie analysts warning that the Australian company needs a timely restart at its Gruyere operation if it is to meet its full-year guidance. Gruyere operations are expected to progressively resume over the first week of April following the closure of a main supply road due to rain and flooding. Gold Road has maintained its production and cost guidance ranges but the Macquarie analysts see some risk to the outlook. The stock is up about 20% in the past two months, prompting Macquarie to cut its recommendation to neutral from outperform. Target price remains A$1.70. Shares are down 0.6% at A$1.64. (stuart.condie@wsj.com)

0006 GMT - Brickworks has chosen a very strong successor to its managing director, Jarden analysts write in a note. They tell clients that the elevation of Mark Ellenor to the top job suggests strategic continuity, pointing to the current chief operating officer's heavy involvement in the Australian company's expansion into the U.S. and rationalization of manufacturing operations across the business. The analysts believe that Lindsay Partridge, a doyen of Australia's building industry, will be hard to follow as MD but say that Ellenor has strong experience across both building materials and property development. Jarden has a neutral rating and A$28.50 target price on the stock, which is down 2.5% at A$27.79. (stuart.condie@wsj.com)

2332 GMT - Strike Energy is likely to get a higher price for natural gas produced at its West Erregulla asset than Macquarie previously expected, making the project more valuable. Macquarie now thinks gas from West Erregulla will fetch A$5.00/GJ under a contract to supply Wesfarmers. It assumes a price review will happen before Strike Energy makes a final investment decision on the project in August. "Our target price is +5% to A$0.22/share on higher West Erregulla valuation," says Macquarie, which retains a neutral call on the stock. Strike Energy is down 3.9%, at A$0.25 today. (david.winning@wsj.com; @dwinningWSJ)

2313 GMT - Synlait Milk's full-year outlook has markedly deteriorated over the past six weeks, Macquarie analysts warn in a note. They tell clients that the dual-listed dairy company's revised annual earnings guidance reflects inventory discounting, lower volumes of nutritional products and a weakening lactoferrin market. While Synlait's lenders have offered a lifeline by extending a debt-prepayment requirement to mid-July, the Macquarie analysts caution that company directors have pointed to material uncertainties that may threaten Synlait's ability to trade as a going concern. Macquarie cuts its target price on Synlait's New Zealand-listed shares to NZ$0.60 and keeps an underperform rating on the stock. Shares are down 2.9%, at A$0.68. (stuart.condie@wsj.com)

2141 GMT - For Goldman Sachs, the key source of disappointment in Orora's profit warning was the resetting of expectations for its North America business. That's because 1H earnings from North America had been resilient, with margins expanding some 98 basis points year-over-year. Orora pointed to a 3% decline in USD-denominated revenue in 2H, implying weaker margins than GS expected. In a note, analyst Niraj Shah says Orora's revised guidance for North America mostly reflects price deflation in 2H "as lower input costs are being passed on to customers in an increasingly competitive backdrop and a potential slowdown in operational efficiencies (price discipline/pro-active cost alignment)." (david.winning@wsj.com; @dwinningWSJ)

2121 GMT - Citi cautiously expects packaging company Orora's latest profit warning to be the last. That's because investors will have reset expectations to a low level and there are signs that the outlook is improving. Citi points to industry data suggesting conditions for paper and glass are at least stabilizing, although it wants more information about the end-markets of Orora's recently acquired Saverglass business to gain conviction that the cycle of profit downgrades has ended. "Looking forward there appears to be price/demand driven green shoots, which are likely to be too late to impact FY 2024," says Citi. "However current industry data suggest these will begin to impact FY 2025 positively, which appears largely in line with where expectations will likely land." (david.winning@wsj.com; @dwinningWSJ)

2118 GMT - One takeaway for Jefferies from Orora's latest downgrade to expectations for its recently acquired Saverglass business is that the dynamics of the high-end and commodity glass markets are not all that different. Both of their profit cycles are exposed to shifts in the market balance, analyst Richard Johnson says in a note. Orora now expects Saverglass's FY 2024 Ebitda to be down around 12%, as destocking by customers leads to weaker volumes. However, Jefferies says this isn't the full picture, pointing to structural headwinds and so-called "de-premiumization trends" in some of Saverglass's key end-markets. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

April 03, 2024 00:00 ET (04:00 GMT)