0447 GMT - Ampol could yet ease investors' disappointment over its softer-than-expected quarterly earnings by paying a special dividend, Macquarie analysts say. They tell clients in a note that they still see the potential for a special dividend despite earnings so far in 2024 proving choppier than expected. They see the Australian fuel refiner and retailer's non-refining businesses as being capable of achieving better growth through the rest of the year. Ampol's strategy of ceding market share in base-grade gasoline to discounters to prioritize margins over volume appears to be paying off, they add. Macquarie lowers target price 5% to A$40.35 but keeps an outperform rating on the stock, which is down 3.7% at A$35.46. (stuart.condie@wsj.com)

0424 GMT - Bubs Australia's softer-than-expected 3Q leaves the infant-formula supplier requiring a strong finish to its fiscal year to hit its A$100 million annual sales target, Bell Potter analyst Jonathan Snape says. He writes in a note to clients that the ASX-listed company's March-quarter revenue of A$19.9 million fell short of his A$27.4 million forecast on softness in the U.S. and China. He acknowledges that Bubs is confident that 4Q gross sales will be at least 58% higher than those in 3Q, which allows it to hit its full-year target, but keeps a speculative hold rating on the stock, which is down 1.7% at A$0.1475. Target price rises 7.1% to A$0.15. (stuart.condie@wsj.com)

0406 GMT - Origin Energy keeps its bull at Jarden after the Australian energy producer and retailer delivered higher-than-expected 3Q realized LNG prices. The broker's analysts tell clients in a note that March-quarter LNG prices were 13% higher than they had forecast. They lift their forward pricing estimates, supporting a 2.6% increase in their stock target price to A$10.00. Keeping an overweight recommendation on the stock, the Jarden analysts are now looking ahead to next week's investor briefing by Octopus Energy, in which Origin holds a 23% stake, and the expected unveiling in June of Origin's revised shareholder distribution policy and an updated investment strategy in energy transition. Shares are flat at A$9.75. (stuart.condie@wsj.com)

0124 GMT - The coming annual Macquarie Australia Conference is unlikely to be a "downgrade conference,"with an improving earnings backdrop set to provide a net positive surprise for this year, say Macquarie analysts in a note previewing the event due next week. With 113 companies slated to attend, Macquarie expects the impact of sticky inflation, delayed rate cuts, geopolitical events and AI to be key themes. Using a quantitative screen that Macquarie runs in the reporting season to identify "potential surprises," it sees AUB, GPT, Reliance Worldwide, GWA, McMillan Shakespeare and Imdex as companies likely to provide a positive surprise anytime between now and their next results in August. Qualitas, Pexa, Propel Funeral Partners, Pro Medicus, Endeavour and IPH could flag potential negative surprises, it adds.(alice.uribe@wsj.com)

0057 GMT - TPG Telecom probably needs to add 75,000 net new mobile subscribers from its network-sharing agreement with Optus to break even on the deal, Goldman Sachs analysts write in a note. They tell clients that TPG needs to grow its subscriber base by this much if it is to achieve its expectation for cash flows from the deal to break even by fiscal 2026. Looking further ahead, Australia's No. 3 mobile provider needs to add 220,000 new users by fiscal 2030, when 5G network costs will peak. TPG, which operates brands including Vodafone Australia, had 5.15 million pre- and post-paid mobile users at Dec. 31, 2023. (stuart.condie@wsj.com)

0048 GMT - The negative near-term earnings impact of TPG Telecom's network-sharing agreement with Optus makes the deal somewhat risky for the Australian telecommunications provider, Goldman Sachs analysts say in a note. They tell clients in a note that the proposed agreement is positive for TPG given the potential for increased mobile subscriber share over time but warn that this is contingent on successful execution. They also note that share gains are not guaranteed even with an improved network, pointing out that Singapore Telecommunications-owned Optus has invested significantly in its regional coverage and discounted aggressively, without making meaningful subscriber gains. GS has a last-published neutral rating and A$5.40 target price on TPG shares, which are down 1.7% at A$4.435. (stuart.condie@wsj.com)

0040 GMT - Zip's U.S. strategy appears to be paying off for the Australian buy-now-pay-later operator, Jefferies analyst Roger Samuel says. He tells clients in a note that the U.S. unit has been the highlight of Zip's performance for four consecutive quarters, although he does flag its inability to lift merchant or customer numbers. He is also positive on Zip's widening domestic margins, but sees risk that higher-for-longer interest rates could put more pressure on transaction margins. Zip probably needs to create a larger buffer just in case, he adds. Jefferies raises the stock's target price 47% to A$1.28 and stays neutral. Shares are down 2.4% at A$1.22. (stuart.condie@wsj.com)

0035 GMT - Higher interest rate expectations and swap curves have resulted in more favorable term deposit margins for Australian lenders, say Macquarie analysts in a note. However, over the longer term, Macquarie expects TD pricing to increase or for customers to switch to higher-rate products, suggesting margin upside is skewed to the near term rather than a structural upside. "Additionally, we continue to expect a mix shift towards more expensive deposits to impact bank margins, albeit at a slower rate." On credit, Macquarie sees strong growth across both mortgages and business lending has continued to result in funding deficits across most banks. "As a result, we expect banks to continue to compete for deposits and for deposit-related headwinds to persist," Macquarie adds. (alice.uribe@wsj.com)

0010 GMT - The upcoming Australian banks' reporting season should be largely uneventful, say Macquarie analysts in a note. While the investment bank expects earnings to decline in FY 2024, consensus has already incorporated headwinds. Plus, the current macro backdrop is "arguably as favorable as it could get for the sector." At the same time, near-term margin risks for lenders is diminishing alongside delayed interest rate-cut expectations. Credit quality also remains supportive, Macquarie says, amid favorable economic drivers and a low unemployment rate. Still, it maintains an underweight call on the Aussie bank sector. (alice.uribe@wsj.com)

2335 GMT - Total lending in Australia improved for the fourth consecutive month in March, say Goldman Sachs analysts Andrew Lyons and John Li in a note analyzing regulator data. This, they say, provides confidence that the trough of credit growth has been passed. Still, the analysts say they have "yet to see signs of a material acceleration." With regards to housing credit growth, for the three months annualized to March, ANZ is leading the major lenders, GS says, followed by Westpac, NAB and CBA. For business banking, on a three-month annualized basis, NAB leads its major bank rivals, as it does for retail deposits for the same timeframe. (alice.uribe@wsj.com)

(END) Dow Jones Newswires