0232 GMT - Elders retains its bull at Bell Potter despite the agricultural products and services provider's weaker-than-expected 1H trade. Analyst Jonathan Snape tells clients in a note that he had already expected Elders' full-year performance to show an unusually strong skew toward 2H, but that the 1H performance has prompted him to lower his outlook to reflect factors including weaker levels of livestock trade. He cuts his net profit forecasts for FY 2024, FY 2025 and FY 2026 by 16%, 8% and 6%, respectively. Target price falls 4.2% to A$9.10, but Bell Potter keeps a buy rating on the stock. Shares are up 1.5% at A$8.295. (stuart.condie@wsj.com)

0220 GMT - Brambles' pricing growth is set to moderate but remain positive, Jarden analysts reckon. Market concerns that the Australia-listed pallet supplier will be forced to lower prices are unfounded, the analysts tell clients in a note. They point out that U.S. consumer discretionary inventories have remained relatively stable since peaking in fiscal 2023, and see little risk that pallet industry pricing will turn negative. Jarden's analysts see pricing growth at Brambles' CHEP Americas business slowing from 18% in fiscal 2023 to 7.1% in fiscal 2024, and to 2.5% the following year. Jarden has an overweight rating and target price of A$15.70 on the stock, which is down 0.75% at A$15.86. (stuart.condie@wsj.com)

0200 GMT - NextDC's A$1.32 billion equity raise should position the Australian data-center operator to engage with lenders on increasing the size of its debt facilities, Wilsons analysts tell clients in a note. They say that NextDC's expansion ambitions underline the step-up in demand that the company is seeing from its core clients. The doubling of current built capacities at NextDC's S3 and M3 centers look to Wilsons like leading indicators of future contract awards. Meanwhile, the analysts say their concerns over land rezoning related to a planned S5 Sydney center have been considerably eased. Wilsons has a last-published overweight rating and A$20.07 target price on the stock, which is in a trading halt at A$16.71. (stuart.condie@wsj.com)

0110 GMT - The worst looks to be over for Domino's Pizza Enterprises, say Jardens analysts in a note. They point out that the company has taken steps to improve its cost base, franchise profitability and value proposition. At the same time, the balance sheet is improving and cost pressures are moderating. This, combined with same store sales growth across Australia/NZ and Germany, gives Jardens confidence that earnings could accelerate. FY 2025 is likely to be materially stronger, the investment bank says while keeping its overweight call. (alice.uribe@wsj.com)

0032 GMT - UBS picks apart an unusual puzzle in Australia's equity market. When cyclicals outperform on the ASX, typically so do smaller companies, strategist Richard Schellbach says in a note. But this hasn't been the case since the middle of last year, with small caps on the sidelines as blue chips surge, UBS says. "Although this implies small caps deserve a catch-up on the improved macro outlook, we are unsure," UBS says. "A defining feature of this cycle is that rates may no longer be rising, but the growth outlook appears sub-trend." In this environment, higher-quality blue-chip businesses should continue to be more resilient to these challenges, the bank says. (david.winning@wsj.com; @dwinningWSJ)

0026 GMT - Inghams' medium-term margins could expand more than expected as the Australian poultry producer benefits from relatively stable top-line growth and cost-efficiency programs, Macquarie analysts write in a note. They raise their earnings forecasts for FY 2025 and FY 2026 by 3.3% and 2.9%, respectively, on lower feed prices and view further margin upside as possible. They anticipate stable annual volume growth in the low-single digits and an average 3.7% rise in annual revenue through FY 2027. Macquarie keeps an outperform rating and A$4.20 target price on the stock, which is down 1.1% at A$3.56. (stuart.condie@wsj.com)

0020 GMT - Consolidation among major hotel chains is a long-term negative trend for agents like Webjet and wholesalers that include its WebBeds business, says Jefferies. In a note, analyst John Campbell says five operators--Marriott, Hilton, InterContinental, Wyndham and Accor--now control some 25% of global rooms. In North America, that rises to 48%. "Further, the top 5 have circa 640 million loyalty members," Jefferies says. It highlights remarks by InterContinental that loyalty members are 10 times more likely to book direct, bypassing agents and wholesalers. "We're positive on Webjet but flag this as a long-term threat," Jefferies says. (david.winning@wsj.com; @dwinningWSJ)

0020 GMT - The market is likely to appreciate Netwealth's guidance for a very strong 4Q FY 2024 net flow number, says E&P Olivier Coulon in a note. Netwealth's 3Q numbers look solid to E&P and it reckons the stock should perform reasonably well. The company's expectation that 4Q funds under administration inflows are likely to be boosted by several new large transitions commencing, in addition to higher seasonal flows and increased market activity, suggests to E&P that there could be upside to consensus netflows for FY 2024. Netwealth was last down 1.4% to A$19.99. (alice.uribe@wsj.com)

0017 GMT - APM Human Services International's share price will likely continue to trade at a 10%-20% discount to the best available bid, unless competitive tension emerges, says Jefferies. APM saw private-equity firm CVC walk away from a A$2.00/share proposal, but then received a proposal worth A$1.40/share from major shareholder Madison Dearborn Partners. "In our view due diligence on APM for other interested parties would be at earlier stages and a couple of months behind CVC," analyst Wei Sim says in a note. APM is up 2.9% at A$1.24/share.(david.winning@wsj.com; @dwinningWSJ)

0013 GMT - Australian gold miner Westgold Resources needs to demonstrate synergies from its merger with Karora Resources, Macquarie analysts say in a note. They tell clients in a note that the transaction provides Westgold with scale, but neither company has provided the market with long-term outlook commentary. They reckon Westgold's production will rise 70% over five years, while the number of shares it has on issue will double. Production could double over a 10-year horizon, they add. Macquarie cuts target price on Westgold by 19% to A$2.20 on the impact of the merger's share dilution and lower their rating to neutral from outperform. Shares were at A$2.10 ahead of Thursday's market open. (stuart.condie@wsj.com)

0012 GMT - A key question for Domino's Pizza Enterprises at its upcoming strategy day is whether the fast-food company should close some stores or pause its rollout, says Jefferies. In a note, analyst Michael Simotas says Domino's needs to lift sales per store. He points to Japan where average weekly unit sales are some 5% below pre-pandemic levels. "In our view, too many stores were opened too quickly on Covid-driven economics that weren't sustainable," Jefferies says. A few store closures, or a pause in the rollout, could allow the business to grow into its footprint, restoring franchisee and corporate store profitability, the bank says. (david.winning@wsj.com; @dwinningWSJ)

2308 GMT - NextDC's A$1.32 billion equity raise doesn't materially change E&P Capital analyst Paul Mason's view of the Australian data-center operator. Mason had already flagged his expectation that rising demand would prompt NextDC to raise equity in the next two years and reckons that the new entitlement offer should be well taken up by the market. E&P has a last-published positive recommendation and A$22.94 target price on the stock, which last traded at A$16.71. (stuart.condie@wsj.com)

2301 GMT - Macquarie's upcoming FY 2024 earnings look largely irrelevant to Jefferies analyst Matthew Wilson, indeed seeing investors more concerned with FY 2025 guidance and short-term outlook. In a note, Wilson says FY 2024 earnings should be a "trough" year. Into the future, Jefferies reckons Macquarie remains well-placed to benefit from the positive longer-term trends in energy, infrastructure, urbanization and digitisation. The investment bank expects constructive guidance across the full suite of Macquarie's businesses, allowing for investment in wider trends, as well as the option of trading on volatility. (alice.uribe@wsj.com)

2256 GMT - Australian banks are unlikely to see upgrades coming out of the upcoming earnings season amid downside risks to net interest margin, slow loan growth, higher costs and creeping bad debts, Jefferies analyst Matthew Wilson says in a note. Still, he sees that full looking Common Equity Tier 1 could contribute to potential capital management with a buyback of special dividend possible for Westpac. Overall, Jefferies views lenders to be fundamentally fully priced, with money flows seeing them likely stay that way irrespective of earnings. "The risk reward equation is marginal - downside shocks appear more likely than upside surprises, given that markets have already priced in optimistic expectations," the investment bank says. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

April 11, 2024 01:02 ET (05:02 GMT)