0408 GMT - Appen's 2Q update shows there is life for the data-annotation provider following the loss of its key contract with Google, Canaccord Genuity analysts write in a note. They see enough in the update to raise their recommendation on the stock to speculative buy from hold, highlighting a recovery in revenues toward the end of the quarter. They tell clients in a note that gross margins remained stable across the June quarter, which was Appen's first without Google as a customer. While still keeping an eye on cost reductions, they raise their price target by 33% to A$0.80. Shares are up 20% at A$0.805, putting them 83% higher so far this week. (stuart.condie@wsj.com)

0159 GMT - Technology One's ambition of doubling its profit over the next five years looks conservative to its bull at Morgans amid expectations of accelerated annualized recurring revenue growth. Analyst Nick Harris tells clients in a note that he is not surprised that the Australian software developer brought forward its A$500 million ARR target by six months to 1H fiscal 2025, and thinks its ambition of A$1 billion ARR by fiscal 2030 is easily achievable. He reckons that the stock should hold its earnings multiple and roughly double in price over the next five years. Morgans has an add rating and A$20.50 target price on the stock, which is up 4.75% at A$20.50. (stuart.condie@wsj.com)

0106 GMT - ReadyTech's contract with Avondale University supports confidence that other deferred deals will be signed in fiscal 2025, according to Wilsons analysts. They write in a note that the Avondale agreement was one of a small number that took a while to close, resulting in the Australian software developer's fiscal 2024 guidance downgrade back in February. The Wilsons analysts expect fiscal 2024 results to be comfortably within revised guidance and will be keenly looking for fiscal 2025 guidance at next month's earnings announcement. Wilsons keeps an overweight recommendation and A$3.91 target price on the stock, which is down 0.9% at A$3.27. (stuart.condie@wsj.com)

0016 GMT - Technology One's improving revenue quality and considerable growth opportunities keep Wilsons bullish on the business-software provider. Wilsons analysts tell clients in a note that Technology One's products, markets and capabilities all look more favorably tilted toward its aim of doubling annualized recurring revenue than they did the last time the Australian company aimed for such an achievement. They point out that Technology One's strong balance sheet gives it firepower for acquisitions and potentially special dividends. Wilsons lifts its target price 15% to A$22.28 and keeps an overweight recommendation on the stock, which is up 3.2% at A$20.22. (stuart.condie@wsj.com)

2341 GMT - IGO's ample liquidity of more than A$1 billion positions the mining company well for shareholder returns, says Macquarie. It expects IGO to declare a final dividend of A$0.15/share, which would represent 40% of underlying free cash flow in 2H of FY 2024. "Incorporating 4Q quarterly result and FY 2025 guidance updates results in mixed earnings changes with a 9% upgrade in FY 2024 and 63% cut in the earnings sensitive FY 2025," adds Macquarie, which has a neutral call on IGO's stock. (david.winning@wsj.com; @dwinningWSJ)

2328 GMT - Perseus Mining's production and cost guidance left Macquarie feeling underwhelmed, but the bank took heart from news that the gold miner's key growth projects remain on track with prior commentary. Perseus expects 1H gold output of 220,000-260,000 oz, some 12% below Macquarie's forecast at the midpoint of the range. All-in sustaining cost guidance of US$1,230-US$1,330/oz for 1H was 11% higher than Macquarie's estimate. "The softer 1H guidance sees our EPS estimate reduce 16% in FY 2025 with less than 2% changes thereafter due to grade/hedge adjustments," says Macquarie, which retains an "outperform" call on Perseus's stock. (david.winning@wsj.com; @dwinningWSJ)

2321 GMT -- Aeris Resources is a high-risk, high-reward copper producer with a leveraged balance sheet, says Macquarie, which has just turned bullish on its stock. Aeris ended June with net debt of A$15 million, but what caught Macquarie's eye was an upbeat outlook for FY 2025 production and cost guidance. Copper production is projected at 27,000-32,000 tons, well above Macquarie's 23,300-ton forecast. Macquarie says Aeris is currently trading on compelling multiples, including FY 2025 enterprise value-to-Ebitda of 1.1x and a free cash flow yield of 22%. "Recent share-price weakness and strong FY 2025 guidance leads us to upgrade to outperform," from neutral, Macquarie says. (david.winning@wsj.com)

2311 GMT - Morgans raises iron-ore miner Fortescue to "add," from "hold," but says it is doing so cautiously. The driver of the upgrade is a significant share-price selloff that has pitched Fortescue's stock some 21% below Morgans's A$23.00 price target. "While still holding concerns around Fortescue's fundamentals, we see iron ore as the key valuation driver for the Perth miner," analyst Adrian Prendergast says. "A difficult rating upgrade given we see substantial risks and fundamental challenges still facing the business." Fortescue ended Tuesday at A$18.28. (david.winning@wsj.com; @dwinningWSJ)

2252 GMT - Jefferies is beginning to see a pathway for Aeris Resources to be able to fund development options from operating cash flow and alternate funding strategies, such as offtake deals. Aeris says Barbara and Constellation are key deposits that can support its growth, with plans to advance a feasibility study on the former over the next 12 months and do more drilling on the latter. "However, the path is narrow and beset with execution and commodity price risks," analyst Daniel Roden says. "We see upside to the current share price levered on a rising copper price environment, although the uncertainty on execution remains too high for now." Jefferies retains a hold call on the stock. (david.winning@wsj.com; @dwinningWSJ)

2249 GMT - While Perpetual's valuation metrics aren't stretched, its asset management unit's operational trends remain under pressure, Macquarie analysts say in a note. They add that an optimistic outcome on the net proceeds from the sale of Perpetual's corporate trust and wealth management units only present limited upside, highlighting that net proceeds currently remain unknown. "More information on the estimated proceeds is expected at the FY 2024 result," Macquarie says. It resumes coverage with a neutral recommendation and A$22.80 target price. Perpetual was last down 0.3% to A$21.83.(alice.uribe@wsj.com)

0524 GMT - BHP's agreement to buy a 50% stake in the Filo del Sol and Josemaria copper projects may lead it to be conservative when deciding its final dividend in August, says RBC Capital Markets analyst Kaan Peker. He says RBC is expecting a US$0.78 final dividend, equal to a 60% payout. The deal to jointly buy Filo with Lundin Mining, plus acquire half of Lundin's Josemaria project, will cost BHP about US$2.1 billion. "BHP has been very vocal in their stance that they need to grow their copper business," Peker says of the deal. "Moreover, it provides a good strategic fit with the JV partner (Lundin Mining), who has extensive in-country knowledge/operational experience and synergy/regional consolidation of assets/infrastructure." BHP is down 1.6% at A$41.42 amid a pullback in mining stocks. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(END) Dow Jones Newswires

July 31, 2024 01:00 ET (05:00 GMT)