0347 GMT - Universal Store's long-term appeal as a retail proposition and investment opportunity remains intact for analysts at Morgans despite the past 10 months' share-price surge. Universal Store's shares have more than doubled in value since June 2023, but Morgans analysts keep an add rating on the stock, saying growth opportunities remain in place. They tell clients in a note that the performance of Universal's Perfect Stranger women's banner is justifying an accelerated expansion. Morgans lifts its target price by 15% to A$6.50. Shares are down 0.7% at A$5.71. (stuart.condie@wsj.com)

0315 GMT - Australian underwear maker Step One keeps its bull at Morgans amid materially improved sales momentum and operating margins. Analysts Alexander Mees and Emily Porter say that inventories have started to track down and U.S. losses appear to have been all but eliminated. They tell clients in a note that the quality of the product and brand are becoming apparent, supporting a tangible-asset valuation to back up the share price. All told, they anticipate sustained positive and profitable growth. Morgans lifts the target price 30% to A$2.15 and keeps an add rating on the stock. Shares are up 8.4% at A$1.865. (stuart.condie@wsj.com)

0139 GMT - The divergence in valuation between Commonwealth Bank and Australian major banking peers Westpac and ANZ looks unjustified, according to Morningstar analyst Nathan Zaia. In the ratings company's 1Q Australian bank report, it sees that Westpac and ANZ are modestly undervalued, while CBA is expensive. At the cheaper end is MyState and Bank of Queensland. But, price/book discounts should unwind as Westpac and ANZ hold market share and deliver similar earnings growth to CBA. Morningstar expects that overall, Australian banks will pull back from aggressive competition on new loans and deposit rates to prevent return on equity from sliding below cost of equity. (alice.uribe@wsj.com)

0129 GMT - Origin Energy's acquisition of the Yanco Delta Wind Farm in Australia's New South Wales state can make up for around 29% of FY 2023 generation volumes from the coal-fired Eraring power plant that will be shut down in the future, RBC says. Origin is buying Yanco Delta from Virya Energy for A$125 million upfront and up to A$175 million when development milestones are hit. The project, which includes a battery, aims to start up later this decade. "This project will replace a material portion of the gap left by the closure of Eraring, and represents over double the existing wind generation Origin currently contracts (700MW)," analystGordon Ramsay says in a note. "We view Origin's geographic diversification of its wind portfolio positively." (david.winning@wsj.com; @dwinningWSJ)

0116 GMT - It's possible that improvement in Domino's Pizza Enterprises' same-store sales in Japan through January and February haven't been maintained, say Citi analysts in a note. In an analysis of Domino's investor day, Citi says the timeline of the turnaround in France, Japan and Taiwan is uncertain. In tandem with this, Citi says there is a material focus in other slides on Japan issues, which prompts the investment bank's concerns on that market. "Prior to the presentation, we don't see anything in the slides that would lead us to be more positive on the stock. If anything, we are more cautious on the Japan outlook," says Citi. It is neutral rated on Domino's. (alice.uribe@wsj.com)

0111 GMT - Australian fashion retailer Universal Store's recent share-price appreciation moves Jarrod Chisholm to take a more cautious view of the stock. Universal Store's shares have more than doubled in value since June 2023, a performance that Chisholm calls thrilling. He tells clients in a note that Universal Store is still enjoying margin tailwinds and managing costs well but thinks that the risk-reward now looks less attractive. He raises his target price 19% to A$6.25 but lowers his recommendation to neutral from buy. Shares are down 1.0% at A$5.69. (stuart.condie@wsj.com)

0100 GMT - Netwealth's 3Q FY 2024 funds and flows exceeded UBS forecasts and consensus, alongside upbeat outlook commentary, says the investment bank's analyst Scott Russell in a note. "Flows appear to have turned the corner after a sluggish 2023," he says, attributing this to both industry conditions and management actions to enhance product range. Netwealth's flows are consistent with UBS's view that greater certainty on interest rates is spurring activity amongst financial advisers, the investment bank says. UBS keeps its buy rating on the stock, and raises its target price 5.6% to A$22.50. Netwealth rises 3.3% to A$19.90. (alice.uribe@wsj.com)

0057 GMT - Northern Star's annual all-in sustaining costs are now projected by Macquarie to average A$1,835/oz following the gold miner's updated view yesterday. Northern Star raised its AISC forecast to A$1,810-A$1,860/oz, from A$1,730-A$1,790/oz, after its operations were disrupted by wet weather in 3Q. In a note, Macquarie reminded investors that it had previously forecast FY 2024 AISC of A$1,807/oz. "Importantly, despite the rain impacts, Northern Star has retained FY 2024 sales guidance with commentary that suggests a good end to the year is underway," says Macquarie, which rates the stock at outperform. (david.winning@wsj.com; @dwinningWSJ)

0014 GMT - Building materials supplier James Hardie loses a bull as hopes for a near-term interest-rate cut in the U.S. dwindle. Macquarie drops to neutral, from outperform, because it now expects the Fed to reduce its benchmark rate in December, having previously tipped a maiden cut in July. The bank also projects 50 basis points of rate cuts in 2025. "While we remain staunch believers in the longer-term positioning of James Hardie within a structurally growing U.S. Repair & Remodel market context, delayed interest rate cuts defer the timing of recovery," says Macquarie. "We think this presents a headwind to near-term performance, as it dampens re-rating prospects." (david.winning@wsj.com; @dwinningWSJ)

0010 GMT - UBS is a tad more bullish about the prospects of Australia's S&P/ASX 200 index this year. In a note, strategist Richard Schellbach raises an end-year target for the index to 8000, from a prior forecast of 7660. "Relief from investors that economies are on a more balanced path has seen sentiment and momentum drive markets," he says. "Our sideways directional view on equities largely holds, but the platform we base this off has stepped up." The ASX 200 is last down 0.2% at 7799.5. (david.winning@wsj.com; @dwinningWSJ)

0008 GMT - Bank of Queensland's 1H FY 2024 cash earnings and dividend are likely to fall, says Morgans' analyst Nathan Lead in a note. BOQ continued to guide for lower returns in FY 2024 at its AGM, due in part to continued revenue and margin pressure from slower credit growth, Lead notes. For the 1H result, due next week, Morgans forecasts a 19% sequential decline in earnings to A$158 million, which is 3% below Visible Alpha consensus expectations. Morgans forecasts a 29% decline in dividends to 15 Australian cents a share (with a 62% payout ratio), which is 14% below consensus. "We think the market may have missed BOQ's AGM payout ratio comment, given consensus is targeting a 70% payout ratio," Morgans says. (alice.uribe@wsj.com)

2341 GMT - NextDC's A$1.32 billion equity raise comes with the Australian data-center operator under pressure to deliver larger and more complex projects without extending building timelines, Jefferies analyst Roger Samuel says. He tells clients in a note that the unprecedented demand has persuaded NextDC to accelerate its expansion plans, observing that large contracts are now at 50-100 megawatts, compared with 10-20 megawatts previously. With NextDC expecting its M2 center to sell out, he says that the company is focused on getting M4 built so that M3 is not its only piece of available local inventory. Jefferies has a buy rating and A$20.48 target price on the stock, which was halted at A$16.71 for the raise. (stuart.condie@wsj.com)

2322 GMT -- The near-term outlooks for net flows at Netwealth look good, but this appears to be more than reflected in the current share price, say Macquarie analysts in a note. For 4Q FY 2024 the investment bank forecasts around A$3.3 billion of net flows, for Netwealth. The Australian wealth management platform company has called out it expects very strong flows in the June quarter. "No institutional flows were called out either, so these are likely to be at reasonable revenue margins," says Macquarie. It has an underperform call on the stock. (alice.uribe@wsj.com)

2300 GMT - Netwealth's outlook statement for 4Q FY 2024 appears very strong with a number of new large transitions secured, plus the added benefit of seasonality, Wilsons Advisory analysts say in a note. For 3Q, Wilsons says funds under administration was a 2% beat compared to its estimates. It notes that the result was predominantly from Market Movement offsetting. "The market movement is particularly telling - given the higher than expected improvement we believe this implies a strong underlying exposure to international equities," Wilsons says. It reckons Netwealth can reach FY 2024 consensus FUA of A$86 billion, in the absence of a material market sell-off, and expects consensus upgrades. (alice.uribe@wsj.com)

2227 GMT - Northern Star should still hit annual gold-sales targets, despite its 3Q miss on wet weather, Jefferies says. Northern Star sold 401,000 oz of gold in 3Q, some 6.5% below Jefferies' expectations and 5% short of consensus hopes. "Given sales in 1H FY 2024 were 16,000 oz short of production, and Northern Star's bias toward a stronger 4Q, we see the risk of Northern Star missing guidance is low," analyst Mitch Ryan says in a note. "Northern Star will need more than 420,000 oz in 4Q FY 2024 to meet bottom-end of guidance, which is well within capability." (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

April 12, 2024 00:32 ET (04:32 GMT)