0429 GMT - Anglo American spinning off its South Africa-listed shareholdings before any takeover by BHP remains the preferable structure for any deal, according to Sam Berridge​, a portfolio manager at Perennial, which holds BHP stock. There are clearly questions about how the South African assets would trade in their own right once spun out, he says. "But then again, if somebody else--like Glencore, for example--decides that they want to hang on to the South African assets and don't have that complication in any bid that may come from them​, all of a sudden BHP might have to match that​," he says. BHP is down by 0.6% in Sydney at A$43.01/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0428 GMT - ​Anglo American may attract an even higher takeover bid--either from BHP or a rival suitor, according to Sam Berridge​, a portfolio manager at Perennial. The time and complexity involved in discovering and permitting a new mine is key to Anglo's allure, he says. If miners "want to materially increase their copper exposure within the next 10 years, it's going to have to be via acquisition," he says. "And everybody at the big end of town knows that." Berridge​ won't comment on what price could seal a deal. (Perennial holds shares in BHP, not Anglo.) However, he says any company that wants to wrestle control of Anglo away from its shareholders is likely going to need to take "a bit of a leap of faith" that commodity prices will outperform consensus forecasts in future. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0319 GMT - Whether Worley continues to grow strongly isn't immediately clear after the engineering company--for its investor day--provided data on its factored sales pipeline to March but on its backlog only to February, says Citi analyst James Byrne. Headcount also appears flat, he says. Other disclosure suggests a bullish outlook remains intact, he says but adds that Worley's investor-day presentation is missing some granular detail. "Today's pack is helpful to conceptualize" planned growth in revenue and operating leverage, "but perhaps lacking on the information required to quantify it," he says. Worley is down 1.9% at A$15.07/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0156 GMT - Super Retail Group's latest trading update doesn't move the dial for Macquarie analysts, who remain cautious on the stock due to the challenging conditions for consumer-facing companies. They write in a note to clients that Super Retail's fiscal year-to-date sales growth of about 2% fell short of their 2.8% forecast, but warm to strength in the company's various loyalty programs. Macquarie trims EPS forecasts for the company by 1.5% for FY 2024, by 1.4% for FY 2025 and by 1.1% for FY 2026 following the update. It cuts the stock's target price 14% to A$13.80 but stays neutral. Shares are down 0.4% at A$13.395. (stuart.condie@wsj.com)

0143 GMT - Aussie Broadband still looks like a compelling investment opportunity to Wilsons analysts despite the Australian telco missing their 3Q forecasts. They tell clients in a note that, while Aussie Broadband's residential unit and enterprise and government segment were both weaker than expected in the March quarter, the ASX-listed company retains medium-term growth opportunities and the potential for further strategic M&A. Wilsons trims target price 5% to A$4.52 but keeps an overweight recommendation on the stock. Shares are up 0.4% at A$3.685. (stuart.condie@wsj.com)

0135 GMT - The discount on GUD Holdings shares continues to look excessive to analysts at Wilsons even though the auto-accessory retailer isn't firing on all cylinders. The Wilsons analysts tell clients in a note that the Australia-listed stock was trading at about 10.5 times their 2025 earnings forecast before GUD's latest trading update, which looks low given sustained positive performance in GUD's core automotive business. They acknowledge some softness in trade at GUD's AutoPacific Group, but think that this is confined to the more challenged New Zealand market. Wilsons trims target price 2% to A$13.06 and stays overweight on the stock, which is up 9.4% at A$10.69. (stuart.condie@wsj.com)

0127 GMT - IDP Education loses its bull at UBS amid worries over the impact of potential caps on the number of international students in Australia. The investment bank's analysts warn that the student-placement company faces additional uncertainty while Australia's government consults with stakeholders over proposed legislation that could allow it to cap international student enrolments. The analysts say that the consultation process improves the chances of what they call a rational policy, but think that negative market sentiment could prolong a recovery in IDP's share price. UBS lowers target price by 30% to A$17.65 and lowers its recommendation to neutral from buy. Shares are down 15% at A$15.80. (stuart.condie@wsj.com)

0115 GMT - BHP's latest rebuffed bid for Anglo American is fair, and the deal structure appropriate, according to Emanuel Datt, chief investment officer Datt Capital. The all-stock proposal offers "a significant premium" and gives Anglo shareholders ongoing exposure to its investments via both BHP and the South African shareholdings BHP proposes to be spun off before any takeover. "Whilst we respect the Anglo American board's fiduciary duty to maximize the potential upside to their shareholders, this should be pursued responsibly with regard to potential downside risk should BHP walk away from the deal," Datt says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0107 GMT - Ramsay Health Care's performance in the U.K. is perking up, says Jarden. It notes the NHS is relying more on the private sector to clear a backlog of acute surgeries. Analyst Steve Wheen says the proportion of NHS procedures outsourced to the private sector has risen to 10.8% in March, from 7.3% in 2020-2021. "Roughly 73% of Ramsay (UK) admissions are represented by NHS volumes," he says. "Monthly NHS data therefore acts as a useful proxy for the underlying performance of this business unit." Jarden raises its 2H FY 2024 forecast for Ramsay's U.K. revenue growth, excluding Elysium, to 11% at constant exchange rates, from 8%. The bank also upgrades its FY 2025 U.K revenue estimate to 8% growth, from 7%. (david.winning@wsj.com; @dwinningWSJ)

0106 GMT - QBE's 1Q FY 2024 trading update didn't disclose profit metrics, but the key drivers look to be ahead of UBS' 1H FY 2024 forecasts, its analysts Scott Russell and Shreyas Patel say in a note. While the Australian-listed general insurer confirmed its FY 2024 guidance, UBS continues to believe it remains conservative, saying that QBE remains its pick of the GI names. "We believe QBE stock remains inexpensive, considering consensus return on equity outlook in the high-teens and relative to global peers," says UBS, which keeps its buy rating and raises its target price 5% to A$21.00. QBE falls 0.9% to A$17.43. (alice.uribe@wsj.com)

2329 GMT -- Morgan Stanley analyst Kane Hannan would like to see Nine Entertainment grow revenue above industry rates as a result of its A$100 million product and tech investment. Hannan tells clients in a note that revenue growth from improved yields should be the target, alongside improved efficiency across the media conglomerate as ad markets recover from their current downturn. Nine is upbeat on its prospects of achieving this, he adds. MS has a buy rating and A$2.10 target price on the stock, which is at A$1.53 ahead of the open. (stuart.condie@wsj.com)

2319 GMT -- Recent margin trends at Australian banks and outlook commentary are encouraging, say Morgan Stanley analysts in a note. Excluding the impact of Treasury and Markets, underlying net interest margins fell by an average of 3 basis points half-on-half at ANZ, NAB and Westpac in 1H FY 2024. This compares with an underlying decline of 6bp h-o-h in 2H FY 2023, says MS. It notes that mortgage headwinds look to have eased and deposit competition has remained benign. Into the future, MS forecasts margins to stabilize, but reckons the outlook for revenue growth is still weak. The investment bank forecasts revenue to be broadly flat year-on-year in 2H FY 2024, and to increase just 2% y-o-y in FY 2025. (alice.uribe@wsj.com)

2319 GMT - BHP is expected to make a firm offer for rival Anglo American on or before the May 22 deadline, says Jefferies analyst Christopher LaFemina. He reckons an offer above GBP30/share is needed to get a deal done. "We are just not sure that BHP is prepared to go that high," he says. The question will then also be whether any competing bids emerge, LaFemina says. "Meanwhile Anglo must work to convince the market of its standalone value, at the very least to maximize the value in a takeout," he says. BHP's revised proposal was valued at GBP27.53/share. BHP ended Monday at A$43.25. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2259 GMT -- Economist and former member of the Reserve Bank of Australia's policy-setting board, Warwick McKibbin, says the federal government's claim that rebates to offset the cost of electricity prices and rents would lower inflation were incorrect. McKibbin told the Australian newspaper that the idea was a "political trick." These rebates are set to be a centerpiece of the government 2024-25 budget, due to be published at 0930 GMT. McKibbin added that the government's forecast that inflation would be back in the 2% to 3% target band by the end of this year was "unlikely." (james.glynn@wsj.com)

(MORE TO FOLLOW) Dow Jones Newswires

1903 ET - - The shackles holding back Metro Mining have been unleashed, says Shaw & Partners. Metro Mining has raised A$40 million of equity, with potentially another A$4 million to come through a share purchase plan, which will repay junior debt. The company also recently launched its Ikamba transhipper at the Bauxite Hills operation in Australia's Queensland state, which Shaw views as a game changer. "Ikamba will allow Metro Mining to potentially ship 7 million tons of bauxite in 2024," analyst Andrew Hines says. "We expect Metro to earn over A$100 million Ebitda in 2024 and A$150 million in 2025." (david.winning@wsj.com; @dwinningWSJ)

2240 GMT -- Fletcher Building's debt burden is likely to weigh on its valuation in the wake of yesterday's profit warning, says Goldman Sachs. "Specifically, we estimate that net debt-to-Ebitda will peak at 2.2x in December, which is above management's target range of 1-2x (albeit we estimate still below covenant thresholds)," analyst Niraj Shah says in a note. Fletcher now expects FY 2024 earnings before interest, tax and significant items of NZ$500 million-NZ$530 million. Goldman says the midpoint of revised guidance implies a 2H Ebit of NZ$250 million, which is 17% below its prior forecasts and 18% below consensus estimates. (david.winning@wsj.com)

2237 GMT -- The Australian government's 2024-25 budget will show a surplus of A$9.3 billion for the 2023-24 year. The surplus will be the second in a row. However, the budget, which will be published at 0930 GMT, is expected to show a return to deficits over coming years due to what the government calls "unavoidable spending." While those numbers aren't yet known, the indications of size given in a fiscal update late last year suggest they will be substantial deficits. The RBA will be assessing the budget in part on the government's forecasts for deficits, given that the overall direction of the budget balance is a good indicator of whether fiscal policy is working with, or against the goals of monetary policy. (james.glynn@wsj.com)

2233 GMT - The level of outflows Australian fund manager Platinum reported for April is "clearly disappointing," says Bell Potter analyst Marcus Barnard. The investment bank has expected total outflows of A$1.5 billion for March and April, but the actual figure is A$2.2 billion, it says in a note. "The company remains at risk from further fund outflows and declining revenue," says BP, reiterating its earlier view on Platinum. Still, BP says while the outflows are disappointing it remains optimistic about Platinum's new management team, which the investment bank reckons are working to build shareholder value. For this reason, BP keeps its "buy" call on the stock. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

May 14, 2024 01:01 ET (05:01 GMT)