0415 GMT - Miner BHP could approach its 2H payout cautiously as it works through claims related to the Samarco dam disaster, Morgan Stanley analysts reckon. "In our opinion, it is in BHP's best interest to settle as many claims before the start of the U.K. court case [in October] as possible, given BHP's view that double dipping is unlikely to be allowed," the MS analysts say. That puts BHP under some time pressure, they say, trimming their projected 2H payout ratio to 50% from 55% despite also forecasting net debt in the lower half of BHP's target range. That equates to a dividend of roughly US$0.68/share, from a prior estimate of US$0.71. BHP is down 0.2% at A$42.61. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0300 GMT - Fortescue's corporate restructuring is likely to target its energy division, in particular green hydrogen, say Macquarie analysts. "Long critical of FMG's green hydrogen venture, we see a realigned core focus as timely ahead of a deteriorating iron-ore price environment," the analysts say. They expect a shift in focus to renewable energy. Macquarie's target on the stock is raised by 16% to A$14.50. The analysts retain an underperform rating. Fortescue is down 0.8% at A$22.18. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0158 GMT - Evolution Mining delivered a mixed result with few surprises, says RBC Capital Markets analyst Alex Barkley, who reckons the stock will likely get greater direction next month from FY 2025 guidance and a potential impairment of its Red Lake asset. "EVN missed gold guidance and Red Lake site guidance (as lowered at 2Q), although we think both were widely expected to occur," Barkley says. RBC has an underperform rating and A$3.30 target on Evolution, which is up 3.0% at A$4.10. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0120 GMT - Step One keeps its bull at Morgans after apparently vindicating its emphasis on promotional events with strong fiscal 2024 earnings expectations. Analyst Alexander Mees keeps an add rating on the stock, telling clients in a note that the focus on events such as Black Friday has successfully built brand awareness in the Australian underwear retailer. Step One's expectations of A$84 million in revenue and A$17 million in Ebitda are up to 9% and 14% ahead, respectively, of Mees' prior forecasts. He lifts his target price on the stock by 4.7% to A$2.25. Shares are down 2.5% at A$1.755. (stuart.condie@wsj.com)

0107 GMT - Citi takes heart from Santos's latest disclosure around its growth projects. Santos today said its Barossa natural-gas development offshore Australia is 77% complete. "Barossa looks like it will comfortably meet 3Q 2025 first gas, and may possibly move forward to late 2Q," analyst James Byrne says in a note. Similarly, Santos's expectation of a mid-2026 start to the Pikka oil project in Alaska could move forward, Citi says. The bank also thinks the internal rate of return for the Dorado oil project in Western Australia is tracking high enough for the company to approve its construction. Santos said it expects to be in a position to make a final investment decision next year, which should help discussions with potential partners interested in buying equity in the project. (david.winning@wsj.com; @dwinningWSJ)

0016 GMT - Telstra needs to deliver on its cost-reduction target for Jefferies analyst Roger Samuel to become more positive on the stock. Samuel tells clients in a note that the Australian telecommunications provider's latest mobile-price rises and wage agreement have substantially derisked its FY 2025 earnings, but he sees no short-term catalysts. Samuel raises his FY 2025 earnings forecast by 1.2% to A$8.5 billion and his full-year dividend forecast by 2.8% to A$0.185, but keeps a hold rating on the stock. Its target price rises 5% to A$4.20. Shares are up 0.5% at A$3.90. (stuart.condie@wsj.com)

0001 GMT - Domino's Pizza Enterprises' leverage is expected to ease in coming years as its earnings improve, says Macquarie. Domino's leverage has been a focus of investors and the company received a relaxation of its loan covenants from creditors for FY 2024. "With Domino's target leverage ratio of 2.0x and the tough current trading environment, we see continued prudence in capex budgets as likely," Macquarie says. "This, however, may have an impact on the ability to roll out corporate stores and/or acquisitions." Macquarie sees the company's Ebitda growing at a compound annual rate of 8.5% over FY 2024-FY 2027, which will help to bring its leverage down. (david.winning@wsj.com; @dwinningWSJ)

2356 GMT - U.S. interest rate movements will likely be the most significant catalyst for gold prices in the near term, says Shaw & Partners. "The long-term relationship between gold and rates suggests that for every 100 basis points drop in U.S. 10-year real rates, gold rallies by 11%," says analyst Andrew Hines in a note. Shaw now tips gold to reach US$3,000/oz next year, up some 33% on its prior forecast. The bank expects it to remain at the level in 2026, rather than pull back slightly. (david.winning@wsj.com; @dwinningWSJ)

2340 GMT - ASX-listed gold equities' recent outperformance is likely to continue, says Shaw & Partners, which turns more bullish on the price outlook for the precious metal. Analyst Andrew Hines now tips gold to reach US$3,000/oz next year, up some 33% on his prior forecast. Shaw expects it to remain at the level in 2026, rather than pull back slightly. "We recommend an overweight exposure to the gold sector with Ramelius Resources, Genesis Minerals and Southern Cross Gold as our core portfolio holdings," Shaw says. Ramelius is among the lowest-cost significant gold miners on the ASX, Genesis has the asset base and management to develop into a 400,000 oz/year producer, while Southern Cross aims to double its exploration target to 3 million oz within 12 months, Shaw says. (david.winning@wsj.com; @dwinningWSJ)

2304 GMT -- Domino's Pizza Enterprises is right to pivot after opening too many stores on unit economics which were flattered by Covid demand, says Jefferies. "We believe closing the tail of loss-making stores in France and Japan is a sensible strategy," analyst Michael Simotas says in a note. Closing some outlets should support same-store sales growth, while setting the business up for a resumption of growth from FY 2026 onward, Jefferies says. It retains a buy call on Domino's and trims its price target by 4.2% to A$46.00/share. "We take comfort from increased Board oversight and council from external experts, and see upside from the current low share price," Jefferies says. Domino's ended Wednesday at A$36.09. (david.winning@wsj.com)

2300 GMT - Zip's net transaction margin is likely to contract in fiscal 2025 as the Australian buy-now-pay-later provider focuses on growing its customer base, Citi analyst Siraj Ahmed says. Although any interest-rate cuts would lower Zip's funding costs, Ahmed sees margin slipping to 3.7% from the 3.9% seen over the past two quarters due to a rise in U.S. bad debts. New customers typically have higher loss rates than existing customers. Citi now forecasts a fiscal 2025 cash earnings margin of 0.9%, compared with Zip's 1%-2% medium-term target range. Citi keeps a buy rating on the stock and raises target price 36% to A$1.90. Shares are at A$1.605 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

July 18, 2024 00:57 ET (04:57 GMT)