0457 GMT - NAB's FY 2025 earnings are likely to be modestly improved due to more favorable pricing on loans and deposits, Morningstar analyst Nathan Zaia says in a note. On mortgages, he says he doesn't expect there to be an extended period of market share loss, and reckons NAB will return to market growth in home loans in FY 2025. In the Australian lender's 3Q result issued Friday, while lending balances increased 1% in the quarter, the drag remains Australian home loans, up just 0.5%, compared with 1.6% market growth. At the same time, NAB saw a modest market share loss in the last 12 months. "It is understandable management focused on growing the strong SMB lending franchise where returns are better," says Zaia.(alice.uribe@wsj.com)

0315 GMT - Treasury Wine Estates' pivot to luxury bolsters the Australian producer's ability to withstand cost-of-living pressures and reduced alcohol consumption among its customers, Morgans analyst Belinda Moore says. Treasury has several drivers to underpin strong earnings growth over coming years, she tells clients in a note. She is happy to see Treasury reiterate its medium-term targets for its luxury portfolio and notes that Treasury is determined to grow its Penfolds brand in China, deploying its industry leading margin into efforts that should drive strong top-line growth over coming years. Morgans trims target price 1.5% to A$14.80 and keeps an add rating on the stock, which is down 1.2% at A$12.20.(stuart.condie@wsj.com)

0304 GMT - Barrenjoey, one of Magellan's associates, is now a material part of its adjusted profits and likely to provide continued earnings growth going forward, Goldman Sachs analysts Julian Braganza and Brian Kim say in a note. In Magellan's FY 2024 earnings, the company reports that Barrenjoey was profitable over the period, with net profit after tax of A$34.7 million, alongside revenue growth of 40% and disciplined cost management, up 4%. Overall, GS sees that Magellan's associates supported FY 2024 earnings, as it looks toward more growth opportunities. (alice.uribe@wsj.com)

0242 GMT - Magellan's stake in Vinva isn't a cheap buy, but the Australian fund manager is paying for the potential, Macquarie analysts say in a note. As part of the 29.5% acquisition of Vinva, Magellan is counting on a successful execution of distribution into the U.S., but that market is "highly competitive and complex," Macquarie says. From its analysis, Macquarie's analysts estimate an acquisition price-to-earnings multiple of around 27-33 times. "Vinva's track record, capacity, scalability and distribution income upside, we understand the strategic rationale of the acquisition," Macquarie says. But its a "full price to pay," it adds. (alice.uribe@wsj.com)

0240 GMT - The market is being too hard on iron-ore miner Fortescue, says Citi analyst Paul McTaggart. While the price of the steelmaking commodity has dropped recently, Fortescue is down sharply versus its peers, says McTaggart, as he upgrades the miner's stock to buy from neutral. Citi keeps a A$21.00 target on Fortescue. "FMG's 100% iron ore exposure has proved problematic with FMG risk appetite nearing historic lows vs BHP's just normalizing," McTaggart says in a note. While he says it's right to be cautious on iron-ore prices, Fortescue's slump has its stock trading at roughly 0.7x discounted cash flow. The stock is 3.8% higher in Sydney at A$17.465. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0227 GMT - Telstra's strong performance from its mobile business over the last fiscal year does nothing to deter its bear at Morgans. Analyst Nick Harris is positive on the Australian telecommunications provider's 9% rise in mobile Ebitda but still reckons that the stock's at a premium relative to international peers and historic levels. Telstra is trading at about 21 times earnings, which Harris points out is materially above its 10-year average of 15 times earnings. Simply put, he tells clients in a note that there is more downside than upside risk. Morgans raises its target price 6.7% to A$3.20 and keeps a reduce rating on the stock, which is up 0.1% at A$3.955. (stuart.condie@wsj.com)

0227 GMT - GQG's 1H FY 2204 result of stronger performance fees offseting higher costs from headcount growth was a lower quality beat when compared with consensus expectations, says UBS analyst Shreyas Patel in a note. Excluding the Private Capital Solutions unit, GQG's core business performed in line with UBS's expectations and was around a 4% beat to consensus. "Overall this is a lower quality beat, and consensus will likely be upgrading its fee margins and performance fees but also materially increasing compensation costs, limiting the extent of operating leverage we would expect to see," says UBS.(alice.uribe@wsj.com)

0222 GMT - ASX's FY 2024 earnings were a small miss against consensus, with dividend also 1% below market expectations, but with guidance reaffirmed after the recent investor day downgrade, there isn't a lot new here to change views, UBS analysts say in a note. Contributing to this view is that there was no update given on Chess implementation or ASIC civil proceedings. (alice.uribe@wsj.com)

0156 GMT - Domain's strong start to its FY 2025 could be an early sign that the Australian property advertiser is regaining lost market share, Macquarie analysts suggest. They point out that Domain's 4% like-for-like growth in July listings compares with 2% at larger rival REA. Domain's outlook is also more positive, with low-single digit growth expected over the current fiscal year, compared with REA's forecast of flat volumes. The Macquarie analysts think that sustained evidence of this trend could help close the current valuation gap between the stocks. Macquarie has a neutral rating and A$3.30 target price on Domain, which is up 0.3% at A$3.10. 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)

0144 GMT - Treasury Wine Estates keeps its bull at Goldman Sachs amid cautious optimism on the prospects for the Penfolds brand's return to China. Maintaining a buy rating on the Australian wine producer, the investment bank's analysts tell clients in a note that there is some risk around Penfolds' return to China following the removal of crippling tariffs but that there is nothing in Treasury's outlook or industry data to materially change their expectations. They also forecast 22% growth in FY 2025 net sales revenue and 41% growth in earnings at Treasury Americas. GS raises its target price 3.4% to A$15.20. Shares are down 0.9% at A$12.235. (stuart.condie@wsj.com)

0137 GMT - Treasury Wine Estates deserves praise for reducing its exposure to the low-margin commercial segment but still needs to navigate unfavorable demand trends facing its premium portfolio, Citi analyst Sam Teeger reckons. He also sees another short-term challenge in the form of uncertainty over its sales to China, which only recently cut punishing tariffs on Australian wine. More positively, Teeger tells clients in a note that Treasury's creation of a new premium division from FY 2026 should provide greater transparency around key luxury brands. This could result in them being prescribed a higher value, he adds. Citi trims its target price 0.2% and stays neutral on the stock, which is down 0.6% at A$12.28. (stuart.condie@wsj.com)

0051 GMT - A pleasing element of National Australia Bank's 3Q FY 2024 result is that its net interest margin is better than expected, staying stable at the 1H level, says E&P analyst Azib Khan in a note. Still, he thinks that NAB could've sharpened its Australian home loan pricing over the last month to deal with mortgage market share loss, and from this there may be some NIM pressure to come over the next six months. At the same time, E&P has concerns over asset quality. "Despite the bad debt charge being lower than expected, there continues to be broad-based deterioration in the business lending portfolio," says E&P. (alice.uribe@wsj.com)

0036 GMT - A small 1% underlying FY 2024 net profit after tax miss for ASX may mean a slight weakness in the stock, say Citi analysts in a note. "The key difference relative to consensus is slight softness in Securities and Payments revenue mainly caused by weaker Issuer Services revenue which seems to have been hurt by the lack of IPO activity," says Citi, which notes ASX flags a return in IPO activity and an increase in listings activity going forward.At the same time, the investment bank reckons the potential for additional uncertainty with respect to the outcome of an ASIC review which will likely continue to overhang the stock, noting that the matter is before the Federal Court of Australia with the amount of possible penalty currently undetermined.(alice.uribe@wsj.com)

0034 GMT - National Australia Bank's reported 3Q FY 2024 cash earnings of A$1.75 billion was largely in line with consensus and Citi estimates, say the investment bank's analysts in a note. Still, they see that the quality of the result was soft. "While cash earnings were in-line, compositionally this was aided by a low bad and doubtful charge," says Citi. "Consequently, this implied a core earnings print that was around 3% below consensus driven by softer revenues than anticipated." Citi notes that the low BDD charge came about despite rising arrears, which is consistent with peer trends, and keeps its sell rating. (alice.uribe@wsj.com)

0031 GMT - ASX's reported FY 2024 earnings are 1% below consensus, but as FY 2025 guidance was provided at the June investor day and reiterated on Friday, there is likely to be only minimal consensus earnings changes, say Barrenjoey analysts in a note. Still, the investment bank views the operating environment for ASX as being arguably positive given uncertainty in interest rates, with small signs of recovery in net interest income.(alice.uribe@wsj.com)

(MORE TO FOLLOW) Dow Jones Newswires

2352 GMT - Domain's fiscal 2025 guidance is in line with analysts' expectations and should offset the impact of the Australian property advertiser's slightly disappointing annual earnings, E&P analyst Entcho Raykovski says. He tells clients in a note that Domain's fiscal 2024 Ebitda of A$137.1 million was slightly short of the average analyst forecast of A$138.8 million. A net profit of A$49.4 million also missed the mark, by 5%. Even so, cost and listings guidance are in line with expectations, he adds. E&P has a neutral rating and A$3.30 target price on the stock, which is at A$3.09 ahead of the open. (stuart.condie@wsj.com)

2338 GMT - Excess capital is building at Commonwealth Bank amid low loan growth, decent profits and relatively modest bad debt expenses, but the lender is now faced with a decision of what to do with it, Mathew Hodge,Director of Equity Research, ANZ at Morningstar says in a note. He reckons that it's reasonable for the lender to save a bit of the capital in case it's needed for the business, or could use it to make a " value-adding purchase when the market is depressed." If there happens to be a downturn, CBA could also have the option of having "a balance sheet unquestionably stronger than peers." Morningstar also likes the prospect of special dividends.(alice.uribe@wsj.com)

2247 GMT - It would be prudent for Woodside Energy to consider a dividend cut, says Macquarie. Woodside's payout ratio has been around 80% for years, but its cash flow is coming under pressure from declines at two big LNG export facilities and tax changes. Also, Woodside is gearing up for two acquisitions worth a combined $3.6 billion. Macquarie expects Woodside's gearing to rise to 15%-16% by end-December, from around 13% now, ahead of a final investment decision on Driftwood LNG in 1H of 2025 and phase 2 of the ammonia plant in Beaumont, Texas, in 2026. "Woodside becomes more exposed to the cycle as gearing and commitments rise," Macquarie says. "A lower dividend payout setting would reduce risk." (david.winning@wsj.com; @dwinningWSJ)

2215 GMT - Pilbara Minerals's agreed takeover of Latin Resources caught Euroz Hartleys by surprise at first, but it feels the deal is sensible when measured by risks and rewards. Australian companies don't have a great track record of success operating in Brazil where Latin Resources owns the Colina lithium deposit. To be conservative on country and execution risk, Euroz Hartleys attributes only 50% the net asset value of Colina to its valuation of Pilbara Minerals. "The Latin Resources acquisition could take some time to digest by markets given its left field nature," analyst Trent Barnett says. "But it's pretty unequivocal that on paper using higher long-term spodumene prices, this is a very accretive acquisition." Also, Pilbara Minerals is an experienced--and successful--spodumene producer, Euroz Hartleys adds. (david.winning@wsj.com; @dwinningWSJ)

(END) Dow Jones Newswires

August 16, 2024 01:06 ET (05:06 GMT)