0302 GMT - BlueScope Steel's balance sheet is "pristine" and, while Asian steel-market weakness could drag on, a potential recovery in U.S. steel prices could support future profits, say Macquarie analysts. The bank's analysts reiterate an outperform rating on the stock, although they pare their target to A$24.00 from A$26.10. "Market conditions are weak, but BSL is controlling what it can well," they say. Reassessing its U.S. midstream capex plans and spreading its buyback over a further 12 months is prudent, the analysts add. The stock is up 0.3% at A$19.95/share, after a 3.1% fall Monday. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0241 GMT - There's seemingly little upside for investors in steelmaker BlueScope, who now have to navigate through a period of lower earnings and higher capital expenditure, says Jefferies analyst Simon Thackray. He raises the bank's target on the steel stock to A$18.03 from A$17.80 but retains an underperform rating. Thackray says there's no fundamental data in steel or construction markets that suggests BlueScope is at the bottom of the cycle. "Even if the cycle does turn, there appears limited reward for investors from here and all the requisite risk of holding BSL at current prices," he says. BlueScope is trading up 0.6% at A$20.00, after a 3.1% fall Monday. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0123 GMT - Deterra Royalties' slight miss on earnings and dividend is tied to higher net finance costs and non-cash hedging losses relating to the planned Trident acquisition, says Macquarie in a note. "The company is pivoting to growth, potentially affecting the sustainability of its high payout ratios," says Macquarie, which has a neutral rating and an A$4.00 target price on the stock. Deterra is up 4.4% at A$3.84/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0121 GMT - Suncorp's comments about the utilization of buybacks for long-term capital management are very positive, say Macquarie analysts in a note. As part of its FY 2024 result disclosure Suncorp said that going forward it plans to run a 60%-80% payout ratio and "active capital management including systematic on-market buybacks."Macquarie reckons this is a clever approach to capital management, given the Australian general insurer's remaining level of franking credits. Suncorp's proformas for its bank and life unit sales should also assist with consensus making them more constructive on the stock, Macquarie says, but keeps its neutral call on the stock, as "understanding market expectations is proving difficult." (alice.uribe@wsj.com)

0111 GMT - Monadelphous delivers a better-than-expected dividend and margins in its FY earnings result--a positive for the engineering stock, which had recently been hit hard by Albemarle's Kemerton contract cancellation, says Macquarie. "This looks a solid result in that context," the bank says in a note. Monadelphous got more than A$3.0 billion in awards for contracts and extensions over the 13.5 months to Aug. 20, even when including the loss of Albemarle's A$200 million contract, the bank highlights. Macquarie has an outperform rating and A$14.15 target on the stock, which is up 9.1% at A$12.89/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0043 GMT - Westpac's 3Q FY 2024 result looks solid to Macquarie analysts, with the result broadly in line at the pre-provision level and ahead of consensus at the headline level on lower bad and doubtful debts. Costs were slightly lower in 3Q, the analysts say in a note, but they expect costs to rise in 4Q. With Westpac outperforming peers by 8%-16% year to date and trading at around 16 times price-to-earnings, Macquarie doesn't expect multiple re-rates to continue. "Like the rest of the sector, we see Westpac as expensive," says Macquarie. (alice.uribe@wsj.com)

0035 GMT - Downside risks are more than priced in to Ampol's stock, says Barrenjoey, even as the refiner and fuel marketer's muted outlook statement and higher capex outlook left questions over the sustainability of dividends. Barrenjoey upgrades Ampol to overweight, from neutral, while keeping its price target unchanged at A$35.50/share. "However, we appreciate delivering on further special dividends in February (as declared for three of the last four years) may be needed to get the stock outperforming again," says analyst Dale Koenders in a note. Ampol's share price is up 0.8% at A$30.77 today, but has fallen more than 10% over the past three months. (david.winning@wsj.com; @dwinningWSJ)

0030 GMT - The acceleration of lending growth, albeit most of it in lower-margin market and trade lending, is a positive highlight of ANZ's 3Q FY 2024 update, say Citi analysts in a note. Still, the investment bank notes that overall there wasn't much for "investors to react to" in the update, with little new information. Unlike its major bank peers, ANZ releases no quarterly profit information, but provides an update on capital, lending and deposit growth, and asset quality, Citi notes. On asset quality, ANZ's trends are better than peers, and likely reflect ANZ's different business mix, Citi says, adding that individual provisions remain very low and below peers. (alice.uribe@wsj.com)

0020 GMT - Vicinity Centres' annual result was stronger than expected by Jarden, which believes the stock can outperform given it's trading at a 5% discount to net tangible assets and offers a 5.6% dividend yield. Vicinity expects FY 2025 funds from operations of between 14.5-14.8 Australian cents/security. That represents growth of 0.3% at the midpoint and includes the impact of A$250 million of asset sales targeted for the current year. Jarden had forecast 14.6 Australian cents. "The bears will likely argue that retail momentum will slow down from here," says analyst Lou Pirenc. "But given the resilience in leasing momentum and long-term leasing contracts, we believe earnings momentum will remain solid, especially with pre-commitments of the major developments suggesting limited leasing risk and strong returns." (david.winning@wsj.com; @dwinningWSJ)

0016 GMT - ANZ's 3Q FY 2024 credit loss ratio, which at 2 basis points, is better than consensus expectations for 2H of 7bps, says UBS analyst John Storey in an analysis of the Australian major lender's 3Q pillar 3 update. This, coupled with a lower liquidity coverage ratio at 1H suggests net interest margin "could have improved sequentially," he says. At the same time, UBS sees that the shape of ANZ's balance sheet and earnings could mirror what has been released from CBA, NAB and Westpac. For ANZ, non performing exposures continue to move higher, but its capital looks strong and well above-board targets, UBS says. (alice.uribe@wsj.com)

0010 GMT - Dexus's decision to reset its dividend payout looks prudent to Jarden, but it sends a bearish signal to investors. Dexus now intends to pay out 80%-100% of adjusted funds from operations, which led to it projecting an A$0.37/share distribution in FY 2025. Jarden had been expecting 46.1 cents, with consensus hopes even higher. "Whilst this is a prudent approach given the ongoing pressure on asset values and the significant development commitments, it highlights the weak cash generation in the current environment," analyst Lou Pirenc says. Jarden has a neutral call on Dexus. (david.winning@wsj.com; @dwinningWSJ)

0004 GMT - Winsome Resources looks vulnerable to a takeover as valuations for lithium companies are squeezed, suggests Euroz Hartleys. It says the recent all-stock offer for Latin Resources by Pilbara Minerals highlights the potential for M&A at the bottom of the lithium cycle. Euroz Hartleys is also heartened by Rio Tinto arguing that investors should ignore the short-term lithium price. "We model US$325 million capex for 300,000 tons per annum production, which is a considerable saving versus Quebec Greenfields and comparable to the Latin Resources's 2023 capex estimate of US$253 million," analyst Trent Barnett says of Winsome's ambitions. (david.winning@wsj.com; @dwinningWSJ)

0002 GMT - ANZ's 3Q FY 2024 credit impairment charge of A$45 million is significantly lower than E&P's forecast of A$499 million and consensus of A$287million, says E&P analyst Azib Khan in a note. "We continue to believe ANZ's collective provision to credit risk weighted assets coverage is light relative to its major bank peers," he says, adding that ANZ's CP/CRWA coverage of 121 bps at end-June compares with CBA at 146 bps, NAB at 151 bps and WBC at 134 bps. "Closing the gap with CBA on this front would require ANZ to bolster its CP by around A$800 million," says E&P.(alice.uribe@wsj.com)

0002 GMT - Sims 2H earnings beat the company's May guidance, and consequently market expectations, but its outlook remarks painted a picture of a market facing continued challenges, according to RBC Capital Markets. While Sims gave no quantitative guidance, as per usual practice, "SGM was relatively subdued with its commentary" including that global steel demand will remain muted, says RBC. It guided to strong zobra prices and hyperscaler data center demand, yet also highlighted continued inflationary pressures that will need cost management strategies, RBC adds. The broker has a sector perform rating and A$12.50 target on Sims, which ended Monday at A$11.04/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2350 GMT - Westpac looks to have stabilized its retail bank performance, but there is still work to do in its business and institutional banking franchises, says Jefferies analyst Matthew Wilson in a note analyzing the Australian major lender's 3Q FY 2024 update. From this, he also sees deterioration in asset quality to "levels not seen for some time," noting that low unemployment and elevated asset prices remain the anchor. "Westpac remains fundamentally expensive, perhaps more reflecting passive flows and greater relative challenges in resources. That position can turn on a dime," says Jefferies, which has an underperform rating on the stock. (alice.uribe@wsj.com)

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2343 GMT - Sims surprises the market with an unexpected A$0.10 final dividend as it posts "a modest beat" in FY earnings versus consensus expectations, says Citi analyst Paul McTaggart. "A final dividend of 10 [cents] per share was not expected by either Citi or consensus and reflects a stronger than expected [balance] sheet," McTaggart says. FY revenue was 6% above consensus, although the company's underlying loss was deeper than expected because of higher depreciation and amortization, he says. Sims ended Monday at A$11.04/share. Citi has a buy rating and A$13.50 target on the stock. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2338 GMT - Ansell's EPS guidance suggests that the Australia-listed PPE manufacturer's fiscal 2025 expectations are higher than analysts had anticipated, Citi's Mathieu Chevrier says. He tells clients in a note that the midpoint of Ansell's adjusted US$1.07-US$1.27 EPS guidance range implies EBIT of US$268 million, compared with the average analyst forecast of US$248 million prior to its fiscal 2024 profit announcement. He reckons this means Ansell is looking for a US$54 million contribution from organic growth and the unit acquired from Kimberly-Clark on July 1. Citi has a last-published neutral rating and A$27.25 target price on the stock, which is at A$27.34 ahead of the open. (stuart.condie@wsj.com)

2335 GMT - Perenti's FY profit result is "a slight miss" versus expectations, but the market could look past that to focus on an improving balance sheet and encouraging free cash flow outlook, Citi analyst William Park says in a note. "Free cash of A$184 million and leverage at the bottom end of the guidance in FY24, accompanied by solid leverage and free cash guidance for FY25, should be well received by the market," says Park. The company's dividend is also ahead of expectations and a sign Perenti expects a solid operational performance in the near term, he adds. Perenti ended Monday at A$1.02/share. Citi has a buy rating and A$1.30 target on the stock. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(END) Dow Jones Newswires

August 20, 2024 01:02 ET (05:02 GMT)