0332 GMT - Xero's changes to its Australian pricing could add up to 2% to its average-revenue-per-user in its next fiscal year, Citi analyst Siraj Ahmed says. Noting that the cloud-accounting provider is only making the changes in Australia at this point, he tells clients that he doesn't anticipate a meaningful ARPU lift in Xero's fiscal 2025. Ahmed adds that price rises have been announced early in Australia in recognition of that country's financial year, which ends June 30. He views accompanying changes to product packaging positively and sees them as part of Xero's broader strategy. Citi has a buy rating and A$159.00 target price on the stock, which is up 0.4% at A$123.62. (stuart.condie@wsj.com)

0258 GMT - Xero's Australian price rises and simplified product range should provide the cloud-accounting provider with significant revenue benefits, Goldman Sachs analysts tell clients in a note. They are positive on the headline price rises, which range from 8%-9% for lower-level plans to as much as 14% for top tiers. They also think that the removal of features from entry level plans should prompt some users to upgrade. The GS analysts expect Xero to unveil a similar plan structure in the U.K., New Zealand and the U.S., although they admit that the extent of some regions' price rises remains unclear. GS raises the stock's target price 3% to A$156.00 and keeps its buy rating. Shares are up 0.8% at A$124.14. (stuart.condie@wsj.com)

0228 GMT - Insignia's outflows could start to moderate, say Jarden analysts in a note. For 3Q, the Australian wealth manager's funds under management and administration increased to A$312.3 billion, but fell around A$900 million, or 0.3%, short of Jarden's estimates, mainly because of higher platform net outflows, along with lower asset management investment gains. Still, with the migration of MLC Wrap products onto Insignia's Expand platform completed in 3Q, Jarden reckons outflows should moderate from here. Insignia's forecast of potentially stronger 4Qasset management net flows and reiterating it remains on track for cost-out targets support Jarden's overweight rating, the investment bank says. (alice.uribe@wsj.com)

0214 GMT - Australia's tougher stance on student visas keep Jefferies analysts bearish on IDP Education. They point out in a note to clients that grant rates for higher-education visa grants fell to 79% in March, from 83% in February. They suggest that this may be dampening sentiment toward Australia, where March visa lodgments were down 15% on a year earlier. Jefferies reckons that Australia was student-placement provider IDP's most popular destination in 1H of its 2024 fiscal year, with 39% of placements. Jefferies has an underperform rating and A$16.00 target price on IDP shares, which are down 0.5% at A$15.81. (stuart.condie@wsj.com)

0206 GMT - ASX has seen its futures growth rebound to what looks to be a decade high in April, say Jarden analysts in a note. After a softer March, when daily average futures volume declined 6% from the previous corresponding period, preliminary April data suggests astrong rebound with a growth of 41%--the highest growth rate in the past decade--taking expected 2H FY 2024 growth to date to 7.7%, versusconsensus of around 5%, says Jarden. The investment bank sees emerging upside risk to FY 2025 consensus EPS from stronger futures volumes and tighter cost control. Still, Jarden says ASX has limited value upside and retains a neutral rating. (alice.uribe@wsj.com)

0119 GMT - NAB's earnings challenges in 1H FY 2024 associated with a decline in net interest margin are likely to persist into 2H, says Moody's Ratings in a note. "The bank's cash earnings of A$3.5 billion were down 3.1% compared with that in the prior period, underscoring the challenges for Australian banks as net interest margins decline," it says, noting that NAB's NIM fell 3 basis points, excluding markets and treasury. Moody's says this was driven by the impact of home-lending competition and higher wholesale funding and deposit costs. Still, Moody's sees asset quality and capital as key strengths, noting NAB's very low levels of problem loans. (alice.uribe@wsj.com)

0107 GMT - NAB's 1H FY 2024 interest margin highlights that expected moderation in mortgage and deposit competition is coming through, say Jarden analysts Carlos Cacho and Jeff Cai in a note. This is a positive sign for Australia's banking sector in general, they say. Another positive from the 1H result is that deposit mix shifts also look to have stabilized with NAB's Australian term deposit share steady half-on-half. "The result also confirms our more benign view of bad and doubtful debts, with credit quality deteriorating only modestly and strong coverage levels maintained," says Jarden, noting that overall the 1H result is broadly in line to slightly better than expected.(alice.uribe@wsj.com)

0054 GMT - The scale of Bapcor's outlook downgrade is disappointing given the automotive-accessory supplier has already twice lowered expectations this fiscal year, Citi analyst Siraj Ahmed writes. He tells clients in a note that he is concerned about the direction of the company, its apparent inability to recruit a capable CEO and the potential for further management departures. There was a widely held expectation that Bapcor's business would prove to be relatively non-discretionary amid current retail weakness, Ahmed says. He observes that the Australia-listed company's full-year profit guidance range is now 18% lower than the average analyst forecast. Citi has a last-published neutral rating and A$6.34 target price on the stock, which is down 23% at A$4.44. (stuart.condie@wsj.com)

0051 GMT - Consensus cost growth forecasts for NAB for FY 2025-FY 2026 look too optimistic, says E&P analyst Azib Khan in a note. But E&P reckons this may not be downgraded as FY 2024 cost guidance remains unchanged.On net interest margin, E&P sees the potential for FY 2024 consensus of 168 basis points to be upgraded to 172 basis points, given that 1H NIM has come in better than expected. "The key positive here is that headline NIM compression appears to have ceased for the moment, and NAB's NIM outlook for 2H FY 2024 suggests to us that the NIM may be flat to up in 2H FY 2024," says E&P. (alice.uribe@wsj.com)

0031 GMT - NAB's 1H FY 2024 earnings print and return on equity of 11.7% look insufficient to justify NAB's share price and valuation, say Citi analysts in a note. Still, the investment bank reckons it's difficult to see a catalyst in this result to spark a de-rating, particularly when "credit quality remains as benign as it is." Investors are also supported by ongoing capital management to hold up the share price in the near-term. "At face value, we think the result is just enough to meet market expectations, but there is little to provide conviction to either the bulls or the bears,' says Citi which is looking to see how NAB's new management will make a mark on the business, thinking that this will be a key driver for the share price. (alice.uribe@wsj.com)

0002 GMT - NAB's 1H FY 2024 result is solid, and in line with consensus, but UBS analyst John Storey wonders if it's enough to sustain the upward trend in the lender's share price. At a group level, UBS says in a note, the result has benefited from a better-than-expected net interest margin outcome. UBS also sees the announcement of a A$1.5 billion increase to NAB's buyback as being positive but notes that underlying divisional drivers for NAB are mixed. UBS has a sell call on NAB. (alice.uribe@wsj.com)

0601 GMT - IAG's profit will likely be higher than UBS's original forecast, the investment bank's analyst Scott Russell says in a note. UBS increases its earnings per share estimates in FY 2024 and FY 2025 by 6%-8% as it also raises its near-term underlying margin forecasts. "We have lifted our forecasts to reflect a likely margin overshoot over the next 12-18 months," UBS says. It notes that this is consistent with UBS's recent update on IAG rival Suncorp and follows its channel checks across Australia and New Zealand since February's reporting. UBS sees that for IAG, consensus margin peaking at 15.2% is on the low side into FY 2025 and FY 2026. It keeps a neutral rating but raises the target price by 8.3% to A$6.50. IAG falls 0.4% to A$6.42. (alice.uribe@wsj.com)

0601 GMT - ANZ's momentum in home lending looks to be showing early signs of slowing, says UBS analyst John Storey in a note looking at Australian regulator data for March. ANZ's share of new business fell to 14% of the wider system, where before it was more than 20%. Westpac, UBS says, was the only major lender to grow above system mortgages, driven by particularly strong growth in owner occupier. Overall, total mortgages grew 0.4% on month for the Australian banking sector, with Macquarie and WBC the strongest performers.(alice.uribe@wsj.com)

(END) Dow Jones Newswires

May 02, 2024 01:10 ET (05:10 GMT)