0449 GMT - Pallets giant Brambles has navigated what its bull at Morgan Stanley calls a Goldilocks downturn, in which declining volumes reduced capex demands without materially hitting earnings. Analyst Andrew G. Scott tells clients in a note that favorable shifts in consumer and destocking trends mean that Brambles is now positioned for top-line growth, incremental earnings leverage and strong cash flow. Its US$500 million share buyback is also 25% larger than he had expected, and he highlights the company's robust balance sheet and strong cash flows. MS keeps an overweight rating on the stock and lifts its target price by 20% to A$20.00. Shares are up 3.1% at A$17.55. (stuart.condie@wsj.com)

0324 GMT - WiseTech's bulls at Morgan Stanley are even more confident on the outlook for the logistics-software provider after it announced three new product launches for its current fiscal year. Analysts Andrew McLeod and Chris Boulus lift their earnings forecasts for the three years through fiscal 2027 by as much as 8%, and expect material revenue growth from the current fiscal year onwards thanks to product investment and efficiency gains. They see the launch of new major releases over the next six months as likely stock catalysts, telling clients in a note that demand for WiseTech's core platform still looks to be rising. MS keeps an overweight rating on the stock and lifts its target price by 26% to A$120.00. Shares are up 9.8% at A$122.66. (stuart.condie@wsj.com)

0230 GMT - Energy company Santos's share-price underperformance appears to be rooted in concerns around a lower free cashflow outlook in 2028/29, but that analysis is flawed, says Barrenjoey. "This is easily explained by PNG LNG sell-down and Papua delays, which were known," says analyst Dale Koenders, referring to two of Santos's projects. Barrenjoey says a 12%-15% free cashflow yield at US$75/bbl oil is likely to increase to 20% as growth projects start up and asset sales happen. "Furthermore, we think Santos is at peak gearing in 2024 in any scenario, and will need to pay out more than 70% of free cash flow to keep gearing in the target range," Barrenjoey says. It has an overweight call on Santos. (david.winning@wsj.com; @dwinningWSJ)

0228 GMT - WiseTech Global should find eager users of its new landside logistics capabilities among its existing large freight-forwarder customers, UBS analyst Lucy Huang says. She sees reasons to believe that uptake of the Australian software developer's new landside tech will be quicker than that for customs and warehousing, with the investment bank's research indicating that there are at least US$35 billion in landside industry inefficiencies to be addressed. There's a potential software total addressable market of between US$4 billion and US$19 billion, she tells clients in a note. UBS keeps a buy rating on the stock and lifts its target price 15% to A$129.00. Shares are up 7.4% at A$119.98. (stuart.condie@wsj.com)

0211 GMT - Brambles still looks undervalued to its bull at UBS even after its stock hit a record on fresh capital management initiatives. Analyst Andre Fromyhr tells clients in a note that the share-price surge that followed the pallet pooler's annual results announcement implies only a modest re-rating. It still leaves the stock trading at 18 times earnings, compared with 19 times earnings for the ASX-listed industrial peers, he adds. The prospect of Brambles maintaining its stronger free cashflows on lower pallet capex supports a continued buy rating at UBS. Target price rises 9.8% to A$19.10. Shares are up 2.9% at A$17.615. (stuart.condie@wsj.com)

0146 GMT - AUB's shares fell yesterday after profit guidance missed consensus, but UBS thinks the insurance broker's forecasts are conservative. AUB projected an FY 2025 underlying profit of A$190 million-A$200 million, falling short of consensus expectations of A$204 million. "Allowing for the A$4 million of profit headwinds specifically called out, the outlook is broadly in line considering initial guidance is usually conservatively struck (7-10% organic) and upgraded through the year," analyst Shreyas Patel says. UBS adds that headwinds in FY 2025 either reflect hits being brought forward, such as a realignment of bonuses within the Tysers business, or represent investments that will benefit earnings in later years. "We think the medium-term margin expansion thesis remains intact," UBS says. (david.winning@wsj.com; @dwinningWSJ)

0137 GMT - Sonic Healthcare made investors jumpy when it cut FY 2024 profit expectations in May, so UBS thinks its annual result is likely to be a relief. Analyst Laura Sutcliffe thinks unchanged Ebitda guidance of A$1.70 billion-A$1.75 billion in FY 2025 will be well-received while highlighting solid growth rates in the Australian pathology services provider's major markets. "In particular, organic, base business growth in the U.S., Sonic's largest market, was 3%, slightly ahead of our expectations," UBS says. It has a buy call on Sonic's stock. (david.winning@wsj.com; @dwinningWSJ)

0133 GMT - Super Retail's annual result and trading update were hard to fault, says Jefferies, which has a hold call on its stock. Pretax profit of A$342.6 million was in line with the bank's forecasts, and while a special dividend of A$0.50/share was also expected, the ordinary payout of A$0.37/share was a touch stronger. "FY 2025 has started well, with all brands reporting positive like-for-like (sales) and improvement relative to FY 2024 exit run rate," analyst Michael Simotas says in a note. Super Retail's same-store sales in the first seven weeks of the new FY are up 3%, so tracking better than the 2% growth projected by Jefferies across FY 2025 as a whole. Super Retail shares rise 5.4% to A$17.56 today.(david.winning@wsj.com; @dwinningWSJ)

0132 GMT - Bank of Queensland's new returns targets are still below the cost of capital, with a still unclear pathway to achievement, say Citi analysts in a note. The Australian regional lender on Thursday walked away from prior FY 2026 targets (above 9.25% return on equity, cost-to-income ratiobelow 50%) and replaced it with a ROE of 8% and CTI of 56%. "Despite that, there still remains a significant bridge between current FY 2026 consensus (around 6% ROE) and management's aspirations," says the investment bank. At the same time, BOQ's material restructuring initiatives also announced Thursday will still be a lot of work, carrying significant risk for investors to "ultimately remain with a bank that returns below the cost of capital."(alice.uribe@wsj.com)

0122 GMT - Sonic Healthcare reiterated its recent guidance for FY 2025 earnings but may be stung by downgrades to market forecasts anyway. That's because it offered more detail alongside its FY 2024 result, with FY 2025 net interest expense projected to be up 25% at constant currency rates. Barrenjoey says this equates to A$159 million, higher than its prior A$142 million forecast. When combined with Sonic's Ebitda outlook of A$1.70 billion-A$1.75 billion and depreciation/amortization forecasts, Barrenjoey derives a net profit range of A$503 million-A$540 million. "At the midpoint (A$522 million), this implies a 5% downgrade versus FactSet consensus of A$548 million," analyst Saul Hadassin says in a note. (david.winning@wsj.com; @dwinningWSJ)

0046 GMT - While Medibank's FY 2024 underlying net profit was in line with consensus, but Macquarie sees it as a lower quality print partly due to miss on policyholder growth. In an early note, Macquarie's analysts say that the stock has had a "good run," but expects it to be lower Thursday. Overall, the investment bank sees that the competition for new business in the Australian private health insurance sector doesn't look to be abating. Medibank falls 1.5% to A$3.86. (alice.uribe@wsj.com)

0014 GMT - There is likely to be more earnings uncertainty ahead for Australian regional lender Bank of Queensland after its market update on Thursday, says E&P analyst Azib Khan in a note. E&P wasn't expecting BOQ to meet its earlier FY 2026 return on equity target of over 9.25% and cost-to-income ratio target of below 50%. "This morning's announcement confirms this will be the case," it says with the lender restating its previously disclosed FY 2026 targets of a ROE of 8.0% and CTI of 56%. "We continue to believe the stock is expensive," says E&P, adding that it sees "plenty of near-term earnings uncertainty and execution risk," associated with BOQ's announcement that it will be converting all Owner Managed Branches to corporate branches. (alice.uribe@wsj.com)

0002 GMT - Medibank's FY 2024 result meets expectations for total operating and underlying profit, but policyholder growth will likely disappoint investors, say Citi analysts in a note. The FY 2024 resident policyholder growth of 0.7% didn't meet Medibank's target of policyholder growth of 1.2%-1.5% in the year, they say. Citi attributes this to the Australian health insurer losing some policyholders in its Medibank brand which is only partly offset by some growth in its Ahm brand. "Stock movements will depend on what the market focuses on but at this early stage we would expect it to move sideways," Citi says.(alice.uribe@wsj.com)

0002 GMT - Whitehaven's US$1.08 billion sale of a 30% stake in its Blackwater coal mine appears to be a better price than the market anticipated, says Citi analyst Paul McTaggart. "The market will now be focusing on renewed capital management initiatives" by Whitehaven, he says. While the Blackwater deals with a pair of Japanese steelmakers are the focus, Whitehaven offered up a mixed bag in its annual results. Its FY 2024 earnings are above consensus estimates, as is its dividend, says McTaggart. However, its FY 2025 production and cost guidance is softer than envisaged, he adds. Citi has a neutral rating and A$8.90 target on Whitehaven, which ended Wednesday at A$7.20. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

(MORE TO FOLLOW) Dow Jones Newswires

2355 GMT - Northern Star's FY profit numbers paint "a picture of a benchmark gold producer in robust financial health and well-placed to capitalize on the strong gold price environment," Barrenjoey analyst Daniel Morgan says in a note. While the result is mostly in line with market expectations, "this financial health can be seen by a slightly better dividend and the extension of the A$300 million buyback for another year," Morgan says. Barrenjoey has a neutral rating and A$14.50 target on Northern Star, which ended Wednesday at A$14.90. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2323 GMT - Medibank's FY 2024 results showed that a favorable business mix and benign claims inflation more than offsetting softer policyholder growth, says Barrenjoey analyst Andrew Adams in a note. FY 2025 guidance looks largely in line or slightly stronger than consensus operationally, he adds, but notes that the Australian health insurer is flagging another year of elevated, around A$40 million, of "non-recurring" costs, which Barrenjoey reckons could imply a 1%-3% consensus downgrade. (alice.uribe@wsj.com)

2317 GMT - While IAG's FY 2024 came in largely as expected, FY 2025 guidance is a slight disappointment to Macquarie analysts. Still, they say in a note that it's explainable due to the shape of the reinsurance spend. At the same time, Macquarie sees that the balance sheet remains solid and combined with conservative reinsurance and catastrophe assumptions, allowed for another A$350 million buyback announced Wednesday. Something for investors to watch out for is that IAG says its exploring an additional license for its Intermediated Insurance Australia unit. "We believe the multiyear foundational building blocks are being laid for an asset sale of Commercial Lines," says Macquarie. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

August 22, 2024 01:00 ET (05:00 GMT)