0356 GMT - Telstra's pricing power will likely be constrained by lower inflation over the coming periods, making costs a key lever of earnings growth, Jarden analysts write in a note. They tell clients that higher-than-budgeted price increases have recently offset much of the impact of elevated inflation, although the Australian telecommunications provider still missed its so-called T25 cost target. They point out that Telstra has regularly launched cost-savings programs since it was privatized and expect to see more in its next five-year strategy, with AI and automation likely to play some role. Jarden has a buy rating and A$4.00 target price on the stock, which is down 0.4% at A$3.425. (stuart.condie@wsj.com)

0044 GMT - The top end of Fisher & Paykel's FY 2025 earnings guidance implies an 8% upside to Morgan Stanley's current forecasts, say the investment bank's analysts in a note. But, they say guidance is contingent on the New Zealand dollar being stable versus other currencies. At the same time, MS says guidance also assumes a further improvement in gross margin during the 2025 fiscal year. The medical-device manufacturer's FY 2024 results contained a positive surprise from consumable sales, specifically a 2% beat compared to street views thanks to the hospital other consumables and homecare consumables, offset by a 1% miss on new app consumables. On hardware, hospitals was a 7% beat versus the street, while homecare was an 8% miss, adds MS. (alice.uribe@wsj.com)

0018 GMT - Australia's Corporate Travel Management keeps its bull at Shaw & Partners even as the broker's analysts become more conservative with their forecasts. The analysts think that the stock has come under pressure from uncertainty over the future value of the company's U.K. government asylum contract, the U.S. economic outlook, and rising unemployment in Australia. They tell clients in a note that these risks move them to pare their fiscal 2025 and fiscal 2026 profit forecasts by about 16%. Shaw's target price falls 14% to A$17.30, but the stock keeps its buy rating. Shares are down 1.7% at A$13.10. (stuart.condie@wsj.com)

0013 GMT - The traditional negative correlation between the performance of Australian real-estate investment trusts and bond yields appears to have broken down, Macquarie says. It highlights that the U.S. 10-year bond yield is up 50 basis points to 4.5% since February. "The U.S. 10-year yield was last at this level in November 2023, yet A-REITs are up 13% on average since then, and have outperformed the S&P/ASX 200 index by 2 percentage points," the bank says. This may reflect a better-than-expected macroeconomic backdrop, and bets on interest rate cuts over the next 6-12 months. "We believe higher for longer rates remain a risk for the sector, particularly if the traditional correlation to bond yields reasserts itself," Macquarie says. It has outperform calls on Arena REIT, Charter Hall, Goodman and Mirvac. (david.winning@wsj.com; @dwinningWSJ)

2358 GMT - Santos's agreement to supply Japan's Hokkaido Gas with up to 400,000 tons of liquefied natural gas over 10 years gets a tick from Macquarie. "We estimate this deal serves to reduce Santos's spot LNG exposure from 40% to 35% during 2027-2030 (the period likely to be most impacted by new global LNG capacity additions)," Macquarie says. It also thinks Santos will seek to do more deals, reducing that further. Macquarie retains an outperform call on Santos's stock. (david.winning@wsj.com; @dwinningWSJ)

1223 GMT - Anglo American's rejection of suitor BHP's call to extend takeover talks is welcomed by the Church of England Pensions Board, a pension fund which holds stock in Anglo and BHP. Chief responsible investment officer Adam Matthews says it is important for Anglo to remain a significant company in South Africa and listed in London, and that "a strongly backed Anglo is better for the mining sector in general" and for the energy transition. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

1123 GMT - The clock is ticking on Australian mining giant BHP's $50 billion bid to take over U.K. rival Anglo American, but the suitor seems unlikely to go hostile, RBC Capital Markets analyst Marina Calero says in a research note. "We see a low probability of BHP going the hostile route given the complexity of the deal," the analyst says. Anglo American shares are trading below the latest bid price as investors reassess the probability of a deal and there aren't many potential rival bidders for Anglo American, with Glencore, Rio Tinto and Vale as the most likely candidates, RBC says. BHP has until 1600 GMT to confirm whether it wants to make an offer or walk away. Anglo American shares fall 1.8% to GBP25.11. (adria.calatayud@wsj.com)

0755 GMT - Anglo American is still unlikely to accept BHP's offer despite the Australian miner's new proposed measures to improve the deal, RBC Capital Markets says. Unless the structure of the deal is changed--which has been the main point of contention--or a higher value is offered, the London-based miner looks likely to knock back the $49.87 billion bid. "Although the measures announced today should mitigate some of the risks associated with the deal structure, the release doesn't quantify the cost associated with them, making it difficult to assess the value included BHP's offer," RBC analyst Marina Calero says. Shares in Anglo are down 1.5% at GBP25.20, while BHP's London shares are up 1.5% at GBP23.70. (christian.moess@wsj.com)

(END) Dow Jones Newswires

May 30, 2024 01:00 ET (05:00 GMT)