0229 GMT - BHP may have had to walk away from its takeover bid for Anglo American, but the world's No. 1 miner could still seek to acquire its rival's metallurgical coal "crown jewels," the Moranbah North and Grosvenor mines, according to Jefferies analyst Christopher LaFemina. He reckons it might make strategic sense for BHP to buy those assets, which Anglo is expected to sell as part of a planned restructuring. However, the mines may also be of interest to Glencore, he adds, while Peabody makes sense as a potential buyer as well. "Anglo's Dawson, Capcoal assets and interest in Jellinbah could be attractive to pure-play Australian operators, financial buyers and Japanese/Indian steel consortiums," LaFemina says. He says those assets could be a fit for a number of companies, including Whitehaven, Yancoal, Stanmore and Coronado. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0202 GMT - Lovisa's cost savings from its change of CEO more than offset the sales impact of a slower-than-expected expansion in China, Wilsons analysts tell clients in a note. They point out that incoming CEO John Cheston's maximum annual long-term incentive entitlement of A$2.4 million compares with the A$28.0 million available to current CEO Victor Herrero. Wilsons lowers its sales forecasts for both FY 2025 and FY 2026 by 1%, but raises its net profit forecasts for the periods by 8% and 5%, respectively, on the lower employment costs. Wilsons lifts its target price 13% to A$34.20 and stays overweight on the stock, which is down 6.6% at A$28.39. (stuart.condie@wsj.com)

0157 GMT - Australian insurance broker Steadfast could benefit from expanding its technology into the U.S., but might need to come up with a new offering for the market, say Macquarie analysts in a note. After traveling to the U.S. and speaking with insurance supply-chain contacts, Macquarie concludes that good broker technology exists in the U.S., but systems are difficult to compare. It reckons it would likely be too costly for Steadfast to roll out its Australian tech in the country, and a better route could be acquiring existing platforms to create the building blocks of a layered technology stack could create a differentiated offering versus U.S. network peers. Macquarie keeps its outperform call on the stock. (alice.uribe@wsj.com)

0153 GMT - Lovisa's impending CEO change costs it a bull at Morgan Stanley, where analysts see increased risks around its global expansion ambitions. MS cuts its rating on the jewelry retailer to equal-weight from overweight, with analysts observing that Victor Herrero, who will step down as CEO next year, is highly regarded by investors due to his global retail experience. Successor John Cheston appears to have less experience outside of Australia and New Zealand, they tell clients in a note. Wile the leadership change is the catalyst for the downgrade, the MS analysts also point out that Lovisa shares are up more than 50% in six months. They cut the target price 6.9% to A$30.25. Shares are down 5.8% at A$28.64. (stuart.condie@wsj.com)

0139 GMT - Lovisa's strategic direction is unchanged by the Australian jewelry retailer's unexpected CEO switch, Morgans analyst Alexander Mees says. He writes in a note to clients that John Cheston, who will replace CEO Victor Herrero next year, has experience working in Asia and speaks Mandarin. He thinks this suggests that Lovisa's long-term ambitions to expand in China, or elsewhere, are intact. The incentive package agreed by Cheston is more modest than that of his predecessor, Mees adds. Cheston could therefore offer better value for money, providing Lovisa's growth trajectory continues. Morgans has an unchanged add rating and A$35.00 target price on the stock, which is down 5.9% at A$28.62. (stuart.condie@wsj.com)

0127 GMT - Shares in Australian rare-earths company Northern Minerals spring to their highest point since May 2023. The gains come after Australian Treasurer Jim Chalmers ordered a China-linked investment fund and its associates to sell their stakes in the entity. Northern Minerals flagged the disposal orders, dated June 2, on Monday. Shares are up nearly 14% at A$0.041/share. The stock, which traded flat on Monday, has been steadily gaining since hitting a three-and-a-half-year low in January. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2344 GMT - Australian coal stocks are again being overlooked amid a focus on base and precious metals, according to Morgans analyst Tom Sartor. "Now looks an opportune time to position in your discounted coal exposure of choice as an upside option over the next coal price upswing," Sartor says. As it stands, stock valuations appear to suggest there will never be another rally in coal prices. "This looks painfully short-sighted," says Sartor. He highlights Whitehaven Coal, New Hope, Stanmore Resources and Coronado Global Resources, saying each has appeal and "traits suiting differing investing styles." For example, Whitehaven has scale and liquidity, while Stanmore has the best risk-adjusted re-rate potential in the short term, he says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0556 GMT - Global miners could nearly double their economic value added, or EVA, in 2024 after a mediocre year last year, Citi analyst Ephrem Ravi says in a note. He estimates the global mining sector would generate an EVA of around US$44 billion this year, versus US$23 billion in 2023, and an economic spread of 3.8%, versus 2.0%." While a large part of the return to value-creation phase is led by strength in commodity prices and cost control, we believe miners deserve credit for maintaining capital and supply discipline," Ravi says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(END) Dow Jones Newswires

June 04, 2024 01:01 ET (05:01 GMT)