0124 GMT - PolyNovo keeps its bull at Macquarie after the skin-healing tech developer beat fiscal 2024 revenue expectations. The investment bank's analysts tell clients in a note that the Australia-listed company's A$104.8 million annual revenue was about 1% stronger than they had anticipated, and about 2% higher than the average analyst forecast. They think that fiscal 2024 will turn out to be PolyNovo's first profitable year, and are looking for an underlying net profit of A$3.7 million. Looking further ahead, they maintain their forecast of 48% fiscal 2025 sales growth and see recently launched regions including India to grow as a proportion of total sales. Macquarie keeps a A$2.75 target price on the stock, which is up 2.5% at A$2.665. (stuart.condie@wsj.com)

0117 GMT - Technology One gets a new bull at UBS, where analyst Apoorv Sehgal is confident that the Australian software provider can sustainably hit its net revenue retention target. Raising his recommendation to buy from neutral, Sehgal tells clients in a note that feedback from Technology One customers in key demographics has been positive. Sehgal's annual recurring revenue forecasts for FY 2026-2028 are 4%-7% above average analyst expectations, while his pre-tax profit forecasts for the same period are 2%-5% higher. UBS raises its target price 27% to A$21.90. Shares are up 2.4% at A$19.42. (stuart.condie@wsj.com)

0051 GMT - Recent weakness in Temple & Webster shares could offer potential investors an attractive entry point to the online furniture retailer, Citi analyst James Wang suggests. The stock is down 40% from its March peak, which Wang thinks could reflect weaker web traffic numbers and the fact that the Australian company is heading into a period over which results will be compared with strong prior performances. He tells clients in a note that Temple & Webster's recent share price implies 15% annual revenue growth over fiscal 2024, but he reckons that the average analyst forecast of 25% looks reasonable. Citi keeps a buy rating and A$11.00 target price on the stock, which is up 3.1% at A$9.54. (stuart.condie@wsj.com)

0041 GMT - Better-than-expected trading updates by Australian discretionary retailers increases Morgan Stanley analysts' hopes that Premier Investments will again beat the market's annual earnings expectations. Citing strong results by Accent Group, Universal Store and Michael Hill, the MS analysts see potential for retail conglomerate Premier to top the average analyst forecast of A$342 million in fiscal 2024 Ebit. They tell clients in a note that Premier is also likely to surpass analysts' expectations for 3% average annual earnings growth through fiscal 2026. MS keeps an overweight rating and A$39.50 target price on the stock, which is up 1.2% at A$31.73. (stuart.condie@wsj.com)

0023 GMT - Woodside's around $900 million bid for U.S.-based Tellurian and cost overrun at its Scarborough energy project grabbed the headlines this week, but another development caught Barrenjoey's eye as well. Analyst Dale Koenders says Woodside is back exploring for big oil and natural gas after a 5-year hiatus. In May, Woodside drilled the Niamou Marine-1 exploration well in the Congo, targeting some 1.4 million barrels of oil or 2.7 trillion cubic feet of gas. "If Woodside can start finding more reserves at a reasonable cost (rather than relying solely on M&A) it could change markets perception toward the company," Barrenjoey says. (david.winning@wsj.com; @dwinningWSJ)

0015 GMT - Woodside's raised forecast for building the Scarborough energy project in Australia is unlikely to be its last overrun, reckons Citi. Woodside has said that Scarborough capex is now likely to total $12.5 billion, up some $500 million on before. "This is consistent with our view of US$1 billion total cost overruns by first gas but schedule being maintained," analyst James Byrne says in a note. "Given the track record of major LNG project delivery, we don't expect this to be the last downgrade." Citi retains a neutral call on Woodside. (david.winning@wsj.com; @dwinningWSJ)

0005 GMT - Times are tough for Lynas Rare Earths and could stay that way for a while, reckons Morgan Stanley. Lynas's 4Q output of neodymium and praseodymium, or NdPr, missed MS's forecast by 13%, while completion of the second stage of its Mt Weld expansion was pushed back to FY 2025. "We think FY 2025 could also be a difficult year for Lynas if NdPr market conditions and prices remain weak," analyst Shannon J. Sinha says in a note. MS, which has an underweight call on Lynas, forecasts NdPr prices of US$53/kg in FY 2025, representing no improvement on FY 2024. (david.winning@wsj.com; @dwinningWSJ)

2358 GMT - Iluka's 2Q update points to continued weakness in end markets, but Morgan Stanley highlights one emerging tailwind for the mineral sands miner. "A positive is the European Commission's anti-dumping regulation, which will add 35-40% duty to Chinese pigment exports," analyst Rahul Anand says in a note. MS thinks this tariff could help western pigment producers and Iluka. Still, the bank remains equal-weight on Iluka's stock, in part because any boost from the tariff in Europe "will likely take some time and requires end-demand to improve." (david.winning@wsj.com; @dwinningWSJ)

2325 GMT -- CAR Group's Brazil business is likely to beat investors' fiscal 2024 expectations thanks to improved penetration of the local dealer market, Macquarie analysts say. This outperformance relative to average analyst forecasts should offset disappointment from the U.S., where the Macquarie analysts see CAR's Trader Interactive falling short of revenue and penetration expectations. CAR is also likely to show headwinds in Australian private listings, they add. All things considered, Macquarie's expectations at the group level are in line with the overall market. Macquarie lifts its target price 5.8% to A$34.60 and keeps a neutral rating on the stock, which was at A$35.15 ahead of the open. (stuart.condie@wsj.com)

2301 GMT - Global Lithium Resources' ability to reach a final investment decision on its Manna project likely hinges on a near-term rebound in lithium markets, according to Jefferies. The company continues to reduce risks to the project ahead of the outcome of a definitive feasibility study in coming months. "We expect several project improvements to materialize including increased recoveries, higher concentrate production and better open pit and underground mining economics," analysts Daniel Roden says. "However, weak lithium markets driven by accelerating supply growth and softer demand growth than expected is likely to impact FID if market improvement doesn't substantiate by year-end." Jefferies retains a "buy" call on the stock. (david.winning@wsj.com; @dwinningWSJ)

2259 GMT - For Jefferies, the concerns from Atlas Arteria's 2Q traffic and revenue update remain a weak recovery in North America and expectations of a slowing economy in Europe. Analyst Anthony Moulder says a 0.9% rise in 2Q traffic on the Chicago Skyway toll road was below the bank's 3.9% growth forecast, while the rebound in traffic on the Dulles Greenway toll road is happening at a slower-than-expected pace. Still, Jefferies is confident that Atlas Arteria's APRR concession in France remains contractually well-protected amid political uncertainty in the country. "At a yield of 7.8%, we see current share price to be providing an attractive buying opportunity to our discounted cash flow valuation of A$6.27 per share," says Jefferies, retaining a buy call on the stock. Atlas Arteria ended Tuesday at A$5.14. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

July 24, 2024 01:01 ET (05:01 GMT)