0439 GMT - Australian banks' return on equity has moved from among the highest to now amongst the lowest globally, say Goldman Sachs analysts Andrew Lyons and John Li in a note. For Australia, GS pins the underperformance on returns largely on net interest margin pressures, as well as the exit from sources of low capital intensive noninterest income. GS reckons that neither of these factors are likely to improve in the short term. Still, GS notes that balance sheet gearing has been a relative tailwind for Australian bank returns. GS recently took a more negative view on Australian banks, keeping its sell call on Commonwealth Bank of Australia, Westpac and Bank of Queensland. (alice.uribe@wsj.com)

0439 GMT - ANZ slowing momentum in mortgages has seen Westpac and CBA take over share of business, says UBS analyst John Storey in a note reviewing regulator bank data for April. In that month, UBS says Westpac and CBA together accounted for 57% of net new mortgages. UBS calls out Westpac for maintaining the lead, as the only major lender to grow mortgages above the wider system in April. Meanwhile, ANZ and CBA grew at system, while NAB continues to remain selective around growth, says UBS. Overall, total mortgages for the sector grew 0.4% month-on-month in April, with Macquarie, regional lender Bendigo and Westpac, the strongest performers. (alice.uribe@wsj.com)

0433 GMT - Lendlease could need to remove some sites from the proposed sale of its Australian communities business to ease competition concerns, Citi analysts write in a note. They tell clients that the sale should still proceed despite Australia's competition regulator pushing out the deadline for its review. The deadline change has resulted in A$130 million-A$160 million of after-tax profit on the sale being delayed, and the Citi analysts see the chance of slightly lower-than-expected capital release as the developer holds back some projects. Citi cuts its target price 8.7% to A$6.30 and stays neutral on the stock, which is up 0.2% at A$5.91. (stuart.condie@wsj.com)

0328 GMT - Life360 could have scope for capital management following its US$100 million U.S. IPO, Morgan Stanley analyst James Bales says. He tells clients that he doesn't expect the location-app developer to immediately deploy the proceeds, but sees scope for capital management or similar partnerships it recently established with space-tech developer Hubble Network. Bales writes in a note that the U.S. IPO is strategically positive, although there is a short-term cost in the form of dilution for holders of its existing Australia-listed shares. MS has an overweight rating and A$17.50 target price on the stock, which is down 1.9% at A$15.16. (stuart.condie@wsj.com)

0149 GMT - Concerns about Australian gold miners' ability to meet production and cost guidance are likely to be more than offset by expectations of rising bullion prices, UBS analyst Levi Spry says in a note. "We have previously flagged some moderate risks around FY25 guidance and medium-term cost profiles...but this pales in comparison to the prospect of nearly A$4,000/oz gold," he says after UBS upgraded its gold-price forecasts. The bank upgrades Genesis, Northern Star and SSR to buy from neutral, and Regis to buy from sell, and raises its targets on those stocks. It also retains buy ratings and raises its targets on Evolution, De Grey, Bellevue and Gold Road. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0003 GMT - Australian crop forecasts look supportive for GrainCorp's fiscal 2025 volumes, Wilsons analysts say in a note. They tell clients that the forecast, if accurate, could put an extra three million tons of grain into GrainCorp's fiscal 2025 supply chain. That's assuming the quality is reasonable, they add. The analysts write that this would drive higher income from receivals, export outloadings and contracted grain sales. The forecast may even imply a tilt toward the upper end of GrainCorp's fiscal 2024 earnings guidance range, they suggest. Wilsons lifts its target price 4.1% to A$8.61 and keep a market-weight recommendation on the stock, which is at A$8.87 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

June 05, 2024 00:59 ET (04:59 GMT)