0412 GMT - Hesta, one of Australia's largest pension funds, plans to further increase in-house management of its portfolio in-house through 2024. Jeff Brunton, the pension fund's head of portfolio management, says it expects to have most of its cash managed internally, rather than via external managers, by around 3Q. Hesta launched its internal fixed income and cash strategies in June 2023, after internalizing some of its Australian equities portfolio in Dec. 2021. "We expect our internal capability could grow about 15% of assets under management over the next few years ," Brunton tells Dow Jones Newswires in an interview. He says currently the internal Australian equities portfolio manages around A$4.5 billion. In August 2023, Hesta said almost 10% of its whole portfolio was managed in house. (alice.uribe@wsj.com)

0341 GMT - Australia's ARB Corp. could get a boost from Toyota's U.S. launch of a new variant of its 4Runner vehicle, Citi analysts speculate. They acknowledge that they don't yet know what accessories the variant will come with, but say it's possible that ARB will have several of its branded accessories factory fitted. A similar variant of the Tacoma vehicle has five ARB products fitted as standard, they observe. The Citi analysts tell clients in a note that such a scenario could add 7% to their FY 2025 gross profit forecast. Citi has a buy rating and A$44.90 target price on the stock, which is down 0.7% at A$39.72. (stuart.condie@wsj.com)

0328 GMT - Goodman Group could use next month's quarterly market update to release positive news on its data-center pipeline, Citi analysts say in a note. They estimate that only about 400 megawatts of Goodman's 2.1 gigawatt secured pipeline is included in the A$12.9 billion of development work currently in progress. They reckon that the conversion of Goodman's assets from traditional warehouses into data centers offers a robust growth opportunity, and point to a trade media report that it plans a new data-center campus in Sydney. The May 8 update could also include market-pleasing news on potential realized earnings from the internalization of Goodman's New Zealand management company, they add. Citi has a buy rating and A$32.50 target price on the stock, which is up 1.4% at A$32.26. (stuart.condie@wsj.com)

0305 GMT - Australian whisky maker Lark Distilling is likely to sign more international distribution agreements or memoranda of understanding in the near term, Canaccord Genuity analyst Allan Franklin reckons. Initiating coverage of the stock with a speculative buy rating, Franklin tells clients in a note that this will require additional advertising and promotion, but is comfortable that Lark can scale it relative to sales. Incremental operating costs are expected to be negligible, he adds. Franklin thinks that operating momentum could support a re-rate for the stock and sees scope for the 30-year-old brand to go global, possibly through M&A. Canaccord Genuity places a A$1.60 target price on the stock, which is up 2.2% at A$1.15. (stuart.condie@wsj.com)

2357 GMT - Whitehaven Coal is restarted at buy by UBS, which takes a positive view of its recent acquisition of the Blackwater and Daunia mines from the BHP Mitsubishi Alliance. In a note, analyst Lachlan Shaw says the deals will drive a doubling in Whitehaven's EPS from FY 2025/2026. They also mean Whitehaven is now primarily a producer of coal used in steelmaking, accounting for some 70% of revenue, and its operations are diversified across Australia's New South Wales and Queensland states. "We are increasingly bullish the met coal outlook given supply constraints (in particular in Queensland) and a resilient demand outlook (with India growth the key long term driver)," UBS says. (david.winning@wsj.com; @dwinningWSJ)

2346 GMT - The current environment of double-digit repricing by Australian general insurers will likely "persist higher for longer," says UBS analyst Scott Russell in a note. Currently, customer retention remains high and customers have also not been significantly increasing excesses. To the extent that claims inflation moderates, UBS reckons earnings may likely overshoot on margin over the next 12-18 months. This prompts the investment bank to increase its general insurance earnings forecasts to reflect this base case scenario. UBS raises Suncorp's target price by 8.3% to A$18.20. It was last up 0.5% to A$16.42. (alice.uribe@wsj.com)

2343 GMT - Whitehaven Coal's planned sale of a 20% stake in its recently acquired Blackwater mine could fetch A$780 million, UBS says. Whitehaven said in January that it would explore a potential sale of a minority stake in the metallurgical coal mine that it bought from the BHP Mitsubishi Alliance. In a note, analyst Lachlan Shaw assumes the minority stake sale completes in 1H of FY 2025 at a 20% discount to the price paid by Whitehaven to wholly own the operation. (david.winning@wsj.com; @dwinningWSJ)

2325 GMT -- There's an argument to be made that the drivers of Elders's 1H earnings miss won't repeat, says UBS. In a note, analyst Evan Karatzas points out that cattle auction values have recovered from record lows, while agricultural chemical margins should normalize in time. Elders is now trading at 11x enterprise value-to-Ebit, which UBS thinks is undemanding and below the long-term average. "We caution that the information provided at the trading update does make it difficult to confirm the earnings weakness was in fact driven by one-off factors," UBS says. "To increase our conviction we will be looking for additional clarity at the Elders 1H result on May 20." (david.winning@wsj.com)

2254 GMT - The economics of Regis Resources's McPhillamys gold project still stack up for Bell Potter because it sees prices of the precious metal staying high. Regis has announced an updated definitive feasibility study that estimates capex of A$960 million-A$1.06 billion to bring the mine into production. Higher costs led some market participants to question the viability of McPhillamys. "In the context of the spot gold price (A$3,550/oz) and our latest long-term gold price forecast (A$3,200/oz) the McPhillamys Gold Project remains an attractive project," analyst David Coates says. He also highlights an emerging opportunity for Regis to build cash ahead of a final investment decision, as well as optionality on funding McPhillamys. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

April 10, 2024 00:58 ET (04:58 GMT)