0116 GMT - ResMed's stronger-than-expected fiscal 2025 guidance and strong balance sheet help keep its bull at Macquarie onside. The investment bank's analysts tell clients in a note that the breathing-tech manufacturer's 4Q gross margin of 59.1% was about 80 basis points wider than they had anticipated, while its fiscal 2025 guidance for 59%-60% compares favorably with their previous forecast of 58.5%. Their revised forecasts now imply a fiscal 2025 gross margin of 59.5%. The Macquarie analysts lift their EPS forecasts for fiscal 2025, 2026 and 2027 by 2%, 2% and 3%, respectively. Macquarie increases the stock's target by 2.4% to A$36.25 and keeps an outperform rating. Shares are up 4.4% at A$33.20 (stuart.condie@wsj.com)

0041 GMT - Goldman Sachs analysts are looking for Commonwealth Bank to outline how Australia's largest lender will position itself as the local economy heads into a cycle of interest-rate cuts. They tell clients in a note that, with Commonwealth's lending growth slightly below that of the overall market over the six months through June, they will be interested to hear what its volume strategy will be going forwards. With Commonwealth scheduled to report its fiscal 2024 result this month, the GS analysts are also looking for commentary on how the bank sees the competitive landscape in business lending. GS lifts the stock's target price 11% to A$91.75 but keeps a sell rating. Shares are down 2.9% at A$128.67. (stuart.condie@wsj.com)

0016 GMT - ResMed's better-than-expected 4Q earnings performance moves Citi analyst Mathieu Chevrier to lift his forecasts for the next two fiscal years. Chevrier raises his EPS forecasts for fiscal 2025 and fiscal 2026, reminding clients that the breathing-tech supplier's 4Q adjusted EPS was about 4% ahead of the average analyst forecast once the impact of an equity investment loss is removed. He writes in a note that weight-loss drugs still represent a potential medium-term risk, but acknowledges the company's view that the drugs will lift awareness of and demand for ResMed tech. Citi lifts its target price on the stock 13% to A$34.00 and stays neutral. Shares are up 6.9% at A$33.98. (stuart.condie@wsj.com)

0003 GMT - REA's bull at Goldman Sachs sees positive early signs at the Australian real-estate advertiser's latest higher-tier listing offering. Analysts at the investment bank stress that industry feedback is limited at such an early stage and confined to the Sydney property market, but tell clients in a note that so-called Luxe Listings seem to be driving increased levels of buyer engagement. Notably, the product seems to be attracting interest from out-of-suburb buyers. The GS analysts say they are encouraged and see the feedback supporting their positive view on REA. They have a buy rating and A$223.00 target price on the stock, which is at A$197.95 ahead of the open. REA is 61% owned by News Corp., which owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

2343 GMT - Australian data-center operator NextDC keeps its bull at Goldman Sachs amid positive signs on pricing and competition. The investment bank's analysts write in a note that continued investment flagged by global hyperscalers points to sustained demand, while U.S. peer Digital Realty's recent comments on pricing also sound positive. They also think that competition in Australia is less fierce than widely believed. The GS analysts are looking for an annual Ebitda of A$195 million when NextDC reports its fiscal 2024 results this month, compared with company guidance of A$190 million-A$200 million. This should grow to A$225 million in fiscal 2025, they add. GS has a buy rating and A$19.00 target price on the stock, which is at A$16.92 ahead of the open. (stuart.condie@wsj.com)

2324 GMT - Macquarie is slightly puzzled by ANZ's underperformance versus other big Australian retail banks in 2024 so far. It notes that ANZ's share price has lagged those of peers by 8-18% year-to-date, and by 2-6% over the past month. "At this point we do not see enough evidence to lead to a sustainable decline in earnings of more than 5%," Macquarie says. It thinks the current investigation into ANZ's markets business is front of mind for investors, but takes the view that the likely outcomes are captured in the share price. "We believe further related underperformance potentially presents a tactical buying opportunity," Macquarie says. (david.winning@wsj.com; @dwinningWSJ)

2240 GMT - Investors should consider buying Super Retail stock and selling shares in JB Hi-Fi, Goldman Sachs says. Despite a slightly improved earnings outlook in FY 2025, valuations of mid-to-large Australian retailers have hit historical peaks, GS says, pointing to Harvey Norman at an 11% premium to Nov. 2021 levels and JB Hi-Fi at a 16% premium. "We see JB Hi-Fi's valuation as expensive given our forecast of zero Ebit compound annual growth rate in FY 2024-2026 and at the risk of market share erosion hence we recommend Sell," analyst Lisa Deng says. In contrast, Super Retail's appeal partly reflects its strong store rollout growth and market share gains. GS retains a buy call on Super Retail. (david.winning@wsj.com; @dwinningWSJ)

2222 GMT - Gross written premium growth rates for Australian general insurers are likely to decelerate, says Jefferies. It notes that insurers have sought to recover rising claims costs and reinsurance expenses through premium increases in recent years. According to analyst Simon Fitzgerald, the general insurers are headed for gross written premium growth at a compound annual rate of 9-12% in 2020-2024. "However, pricing has likely peaked, given reinsurance markets have stabilized, claims inflation is moderating, and consumer affordability is now an issue," Jefferies says. It forecasts compound growth rates for insurers' gross written premium to decline to 4-5% in 2025-2027. Jefferies has a buy call on QBE, and rates Suncorp and IAG at hold. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

August 05, 2024 00:57 ET (04:57 GMT)