0504 GMT - Premier Investments continues to look undervalued to Bell Potter given the growth prospects, and potential demerger of its profitable Smiggle and Peter Alexander brands. Analyst Chami Ratnapala assumes coverage of the stock and tells clients in a note that the Australian retail conglomerate is trading at a conservative 14 times her forecast for its FY 2026 earnings. She adds that it is also trading at a lower FY 2025 earnings multiple than the median of its global peers despite the highly attractive growth trajectory and global expansion of its stationery and sleepwear businesses. Bell Potter has a buy rating and A$35.00 target price on the stock, which is down 1.8% at A$29.10. (stuart.condie@wsj.com)

0252 GMT - Challenger's move to upgrade its guidance for FY 2024 normalized net profit before tax to the top end of the range, should prompt only minor upgrades to consensus earnings forecasts, Morgan Stanley analysts say in a note. This is because the investment bank and others had already largely priced in NPBT of A$592 million, the analysts say. Challenger is guiding for NPBT in a range of A$555 million to A$605 million. (alice.uribe@wsj.com)

0229 GMT - AMP's 1Q FY 2024 update reflects continued headwinds in the Australian retail banking sector, say Jefferies analysts Simon Fitzgerald and William Richardson. For example, for 1Q, the Australian wealth manager's loans dropped to A$23.5 billion from A$24.4 billion in December. Jefferies sees that AMP's banking unit faces headwinds and is keeping it conservative forecasts, seeing that total loans will likely not recover to FY 2023 levels for another five years. It also forecasts net interest margin to stay in the range of 1.10% to 1.14% over the same period. Still, Jefferies is more positive on AMP's platforms and superannuation/investment businesses given significant premiums seen at rivals Hub24 and Netwealth. (alice.uribe@wsj.com)

0220 GMT - Challenger's 3Q FY 2024 earnings reflect the financial company's strategy to drive longer-date sales for its annuity products, where margins and returns are higher, say Jefferies analysts Simon Fitzgerald and William Richardson. For 3Q, Jefferies notes that total life sales of A$1.75 billion, fell 13% on the prior period, with noticeable declines in fixed one-year sales. Still, lifetime annuity sales rose 37% on year to A$202 million, on more retiree demand, while the tenor of Challenger's book rose to 8.1 years versus 6.1 on year. Jefferies keeps its buy rating with the stock trading below the investment bank's target price of A$7.99. Challenger is down 1.9% at A$6.69. (alice.uribe@wsj.com)

0219 GMT - APM Human Services' decision to consider a takeover proposal that is worth less than the one it rejected two months ago leaves Bell Potter analyst Marcus Barnard asking questions. He notes that APM's decision to consider a A$1.40/share proposal from Madison Dearborn Partners comes after it turned down a A$1.60/share private-equity proposal in February, and wonders whether APM is hoping to persuade its new suitor, or someone else, to pay more. Barnard asks how the fundamental value of the business could have changed so much even with APM having issued another profit warning in the interim. Bell Potter keeps a buy rating on the stock, but cuts its target price by 27% to A$1.40. Shares are flat at A$1.175. (stuart.condie@wsj.com)

0200 GMT - Karoon Energy's production downgrade unsettles Citi, although it thinks issues at the Who Dat field in the U.S. Gulf of Mexico appear mostly temporary. "If the Who Dat issues become more permanent, it would suggest Karoon has overpaid for the asset," analyst James Byrne says in a note. "Perhaps more worryingly, it could significantly undermine the equity market's confidence on the company's ability to create value from future acquisitions, and lender confidence to expand the borrowing base." Still, Citi says most of the downgrade at Who Dat appears to be a temporary curtailment of gas production due to low Henry Hub prices, and bottlenecks in the subsea infrastructure, as opposed to reservoir issues. (david.winning@wsj.com; @dwinningWSJ)

0123 GMT - Breathing-tech manufacturer ResMed keeps its bull at Jarden following drugmaker Eli Lilly's weight-loss drug trial results that the investment advisor's analysts say were largely as anticipated. A pair of late-stage studies showed Eli Lilly's weight-loss drug significantly reduced the severity of sleep apnea in obese adults, but the Jarden analysts say it is important to recognize that the trials were not a head-to-head contest with devices such as those sold by ResMed. They say that so-called CPAP machines remain the gold-standard for obstructive sleep-apnea treatment. Jarden keeps an overweight rating and A$31.33 target price on ResMed's Australia-listed securities, which are up 1.0% at A$27.91. (stuart.condie@wsj.com)

0118 GMT - Santos's move to equity marketing its uncontracted share of liquefied natural gas cargoes from the PNG LNG export facility in Papua New Guinea has Jarden speculating about how its strategy could shape up. In a note, analyst Nik Burns says Santos likely has seven uncontracted equity cargoes remaining this year, and 11 in 2025. "The question for Santos is whether it continues to sell these cargoes into the spot market or looks to execute medium-term contracts to move away from spot LNG prices, which have declined below contract LNG prices in the past three months," Jarden says. (david.winning@wsj.com; @dwinningWSJ)

0100 GMT - Woodside Energy's subtle change of language around future LNG supply deals catches Citi's attention. Woodside says it's looking to "layer in" additional long-term offtake LNG agreements, and analyst James Byrne thinks this could mean the company is less sanguine on long-term spot LNG pricing. "We think this is rational and should be received well by the equity market where investors would prefer contracted volumes over greater earnings volatility in spot LNG," Citi says. (david.winning@wsj.com; @dwinningWSJ)

0056 GMT - Whitehaven Coal's sales guidance for its recently acquired Blackwater and Daunia metallurgical coal mines cheers Ord Minnett. Whitehaven says it expects coal sales from the operations, bought from BHP and Mitsubishi, to total 3.5 million-4.0 million tons in FY 2024. In a note, analyst Tim Elder says that is 12% higher than he had forecast. "And, while this appears slightly softer than consensus (-4% at the midpoint), it significantly de-risks production expectations for the assets," says Ord Minnett, which rates Whitehaven a buy. (david.winning@wsj.com; @dwinningWSJ)

0052 GMT - Analysis of other apps' revenue-per-user trends leaves Jefferies analyst Wei Sim feeling positive about the prospects for Life360's ad business. Sim tells clients in a note that there is a general trend of revenue per monthly active user increasing over time, with a ceiling to monetization yet to be established. He observes that Meta has increased its revenue per user more than tenfold in 12 years. The metric is also influenced by the affluence of end users and their data availability, both of which Sim sees as positives for monetization efforts at family safety app developer Life360. Jefferies has a buy rating and A$17.20 target price on the stock, which is down 0.1% at A$13.07. (stuart.condie@wsj.com)

0048 GMT - Challenger's FY 2025 earnings growth could be partly driven by funds management, say Goldman Sachs analysts Julian Braganza and Brian Kim in a note. On Challenger's return on equity target over the near term, GS reckons, depending on cash rate movements and target, the diversified financial company may get close in FY 2025. GS makes earnings upgrades due to the performance of Challengers' funds' management business as well as slight margin upgrades to the life annuity business. It keeps Challenger's target price steady at A$7.50. The stock is down 0.5% at A$6.79. (alice.uribe@wsj.com)

0026 GMT - Breathing-tech provider ResMed's 3Q profit is likely to beat market expectations, Macquarie analysts tell clients in a note. They anticipate a March-quarter net profit of US$292 million on revenue of US$1.19 billion, compared with an average analyst forecast of US$287 million on revenue of US$1.18 billion. Their forecast implies a gross margin of 57.2%, up 110 basis points on a year earlier, but 10 basis points lower than what the broader market is looking for. Looking further ahead, the Macquarie analysts raise their EPS forecasts for FY 2024, FY 2025 and FY 2026 by 2%, 5% and 4%, respectively, to reflect improved device sales on rival Philips's U.S. recall issues. Macquarie raises the stock's target price 2.5% to A$34.30 and keeps an outperform rating. Shares are up 1.8% at A$28.13. (stuart.condie@wsj.com)

2354 GMT - Challenger's Japanese sales in 3Q FY 2024 and continued optimism around Japanese products is likely to be a driver for 4Q, say Macquarie analysts in a note. They upgrade the diversified financial company's earnings forecasts by 1.5% for FY 2024 and 3.7% for FY 2025to reflect stronger Japanese sales and a mix toward more longer maturity annuity products faster than Macquarie had previously expected. For 3Q, Macquarie says total life sales of A$1.75 billion were in line with its expectations, and it raises its target price 2.9% to A$7.20. Challenger was last up 5.3% to A$6.82. (alice.uribe@wsj.com)

1109 ET - North American Construction Group's focus on high-carbon energy markets gives it an edge over its Australian peers, TD Cowen's Aaron MacNeil says in a report. The analyst points out that 50% of NACG's revenues come from these end-markets, and while Australian peers are focusing more on what he calls future-focused metals exposure. "NACG addresses what appears to be a decreasingly competitive wedge of the energy mix," MacNeil says, pointing to high-carbon energy sources such as oil sands and coal, while competitors pivot to other end markets. He adds that the company's estimated free cash flow yield of 18% "is more than justified and that investors can expect enhanced project economics and a continuation of its strong historical growth profile." (adriano.marchese@wsj.com)

0816 GMT - The sharp decline in orders in China isn't causing worry at ABB, CEO Bjoern Rosengren and CFO Timo Ihamuotila say following the publication of the company's first-quarter results. The Swiss industrial-technology company saw a 4% order decline in its Asia, Middle East and Africa region in its first quarter. Rosengren and Ihamuotila say in a conference call that the strong comparable development in countries like Japan and Australia, and in particular India, offset a sharp decline in China, stressing that the region must be viewed as a whole. Shares trade 5.7% higher at CHF44.11. (nina.kienle@wsj.com)

0640 GMT - The tone of recent government inquiries into Australian supermarkets suggests very few market participants are in favor of forced divestitures of big players, say Morgan Stanley analysts in a note. It sees that there could be potentially more market power for suppliers, but it's difficult to see an outcome where supermarkets don't remain dominant. Supermarkets Coles and Woolworths are due to report 3Q FY 2024 updates in coming weeks, with MS seeing that Coles is likely to deliver higher sales growth, although the gap to Woolworths is likely to narrow marginally. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

April 19, 2024 01:05 ET (05:05 GMT)