0356 GMT - The chances of toll-road operator Atlas Arteria being taken over look to be no more than 50-50 to Morgans analyst Nathan Lead. He writes in a note that the probability of a takeover has fallen to 50% from 65%, citing political risk in France, where Atlas Arteria owns assets. Lead also thinks that the potential premium involved should infrastructure investor IFM, which has built a 27% stake over the past two years, launch a takeover has also declined given the recent fall in value of Atlas Arteria's partially owned APRR motorway network. Morgans cuts its target price 7.4% to A$5.02 and keeps a hold rating on the stock, which is up 0.4% at A$5.11. (stuart.condie@wsj.com)

0314 GMT - Investors, concerned about the outlook for iron-ore prices, might be misjudging mining giant Rio Tinto, according to Jefferies analysts. Sure, there is a clear downside risk to iron-ore prices, but the miner's cash flow from its huge iron-ore operations, even at lower prices, is underappreciated, the analysts say. On top of that, Rio has the highest leverage to base metals copper and aluminum of the "big three" iron-ore miners, and the lowest net debt, say the analysts. Yet Rio's valuation is at a discount to most other miners, including certain pure-play U.S. coal miners. "Should Rio really trade at a discount to coal miners?" The analysts reiterate a buy rating on the stock, which is up 0.6% in Sydney at A$120.60/share. Jefferies has a A$147 target on Rio's Australian stock. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0256 GMT - Citi analyst James Wang sees at least A$50 million in potential synergies if department-store operator Myer succeeds with its proposed acquisition of Premier Investments' apparel brands. Wang expects at least A$25 million in additional earnings from margin expansion in Myer's private-label business. He tells clients in a note that there will likely be A$10 million of synergies from the placement of Premier products as concessions in Myer stores, A$7 million from the consolidation of Melbourne distribution centers, and more from cost reductions including at head offices. Citi has a buy rating and a A$36.00 target price on Premier Investments stock, which is up 0.2% at A$29.77. (stuart.condie@wsj.com)

0223 GMT - Telstra's above-inflation mobile price rises are welcomed by its bull at UBS, who sees potential for higher-than-expected average-revenue-per-user at the telecommunications provider. Analyst Lucy Huang tells clients in a note that she sees fiscal 2025 postpaid monthly ARPU rising by A$1.60-A$1.90, once increases at other Telstra-operated brands are factored in. This compares with her prior forecast of A$1.60. She sees prepaid monthly ARPU rising by A$1.47, compared with her earlier forecast of A$1.05. Huang adds that UBS research suggests that consumers remain reasonably tolerant of price rises. UBS has a last-published buy rating and A$4.40 target price on the stock, which is up 2.6% at A$3.745. (stuart.condie@wsj.com)

0205 GMT - Bapcor's unusual new management structure could indicate that the auto-accessory retailer doesn't expect to remain listed for much longer, Jefferies analysts John Campbell and Tom Chapman suggest. The pair write in a note to clients that appointing the same person as executive chair and CEO, as Bapcor has done, is generally not considered ideal governance practice. They agree with the Australian company's board that Bain Capital's A$5.40-a-share proposal was inadequate and suggest that Bapcor consider establishing a data room in the hope of attracting multiple bidders. Jefferies has a hold rating and a A$5.30 target price on the stock, which is up 0.7% at A$5.105. (stuart.condie@wsj.com)

0102 GMT - There is debate in the market over the potential and timing of a recovery in Australia's office market, say Citi analysts in a note based on a survey it conducted with readers of its research to see if they believe office-exposed real estate stocks had reached an inflection point. Citi says the positive response reflects a potential improvement in investor sentiment towards the sub-sector. Still, while transaction activity is showing signs of improvement, the investment bank says it remains cautious on "underlying fundamentals, and cash flow pressure of high office lease incentives and vacancy." (alice.uribe@wsj.com)

0024 GMT - GQG's recent growth in funds under management, prompts Goldman Sachs analysts Julian Braganza and Brian Kim to consider what the ASX-listed fund manager's inflow pipeline and available capacity is ahead of its results. Looking at GQG's FUM and flow trends to end-June, GS says its awaits comments around how GQG's investment strategies and channels support further FUM growth, noting that the fund manager flagged headwinds in institutional that were offset by wholesale and subadvisory. GS remains buy-rated on the stock and is looking for whether the CIO and CEO may monetize their GQG stakes with the share price up substantially since the IPO, which may support greater stock liquidity.(alice.uribe@wsj.com)

0005 GMT - Net fund flows to Australian wealth platforms were up in the March quarter versus the same time the previous year, but investment market gains drove funds under management growth, says UBS analyst Scott Russell in a note. All players, barring Insignia, saw an uptick in their own flows for the March quarter, says UBS. The most obvious trend remains the substantial funds under management migration from incumbents to the specialist platforms, according to the investment bank. It keeps a preference for the specialists Netwealth and Hub24, relative to incumbents Insignia and AMP, believing the "growth runway" for the former group is long. Of the specialists, Netwealth is UBS's pick over Hub24. (alice.uribe@wsj.com)

2348 GMT - The outlook for ASX-listed fund manager GQG's flows looks encouraging, say Macquarie analysts in a note, with the investment bank seeing ongoing upside risk to consensus earnings expectations. For 2Q 2024, GQG reported net inflows of US$6.5 billion, with the company saying it expected continued momentum in 2024, with a "strong" pipeline. Macquarie notes market movements also remained a tailwind in 2Q. Despite a recent re-rating, the level GQG is trading at provides a "reasonable entry point" for investors, Macquarie says. At the same time, the investment bank sees a around 4.5% potential sell-down may be a possible catalyst for a further re-rating. (alice.uribe@wsj.com)

2259 GMT - Industry group Wine Australia says although the volume of the 2024 wine grape crush grew 9% versus the 23-year low in 2023, it's still well below the 10-year average. The group, however, says there's no indication that vineyard area has declined significantly, so there's still a potential for a large crop in coming years. For the first time since 2014, the white crush was higher than the red crush--driven by a decrease in Shiraz, which Wine Australia says reflects low grape prices, red wine stock overhangs and reduced global demand for wine. Despite the 9% increase in volume, the value of the 2024 crush rose just 2%. (mike.cherney@wsj.com; @Mike_Cherney)

0503 GMT - Jefferies analysts are cautiously optimistic about the 2H outlook for mined commodity prices and say they'll be crunching numbers including global manufacturing PMIs, China credit growth and property market data ahead to determine if demand is recovering from its 2Q soft patch. India PMIs and U.S. ISM will also be important to track for 2H, while "interest rates, inflation, the Fed, and the outcome of the U.S. elections will all matter a lot as well," the analysts say. Their optimism stems from an expectation that China's industrial activity will marginally improve and economic growth will be strong in India and Southeast Asia, while infrastructure projects will likely break ground in the U.S. and the Fed could cut rates. Glencore and Alcoa are their top 2H mining stock picks. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(END) Dow Jones Newswires

July 09, 2024 00:52 ET (04:52 GMT)