0425 GMT - Zip's fiscal 2025 margin guidance looks conservative to its bull at Ord Minnett. Analyst Phillip Chippindale tells clients in a note that the Australian buy-now-pay-later provider's outlook was more muted than he had hoped for, but sees its medium-term guidance as unchanged. He acknowledges that the pursuit of transaction volume growth could crimp near-term margins, but also observes that Zip's volumes have already been growing at a faster pace than the overall industry over the past six months. Ord Minnett the stock's target price 26% to A$2.45 and keeps its buy rating. Shares are up 13% at A$2.355. (stuart.condie@wsj.com)

0423 GMT - Zip gets a new bull at Jefferies as analyst Roger Samuel sees the potential for integration with Apple to support the Australian buy-now-pay-later provider's efforts to continue its U.S. expansion. Samuel raises his recommendation on the stock to buy from hold, pointing to Zip's achievement in lifting U.S. transaction volumes despite a slight decline in customer numbers in the country. Samuel forecasts 39% volume growth in fiscal 2025, helped by the acquisition of larger merchants onto the platform, a recently signed partnership with Stripe, and potential integration into Apple Wallet. Jefferies lifts its target price on the stock 28% to A$2.50. Shares are up 12% at A$2.345. (stuart.condie@wsj.com)

0351 GMT - Zip's bull at UBS sees scope for upgrades over the next two years in the Australian buy-now-pay-later provider's earnings outlook. Analyst Lucy Huang tells clients in a note that transaction volume growth in the U.S., a fiscal 2026 recovery in domestic volumes and the launch of capital-light adjacencies can all drive improved operating leverage. Her confidence in the outlook is supported by the company's updated confirmation that its medium-term targets are for delivery over the next two years. UBS lifts its target price on the stock by 29% to A$2.45 and maintains a buy rating. Shares are up 12% at A$2.33. (stuart.condie@wsj.com)

0248 GMT - Tourism Holdings Rentals loses its bull at Wilsons on growing uncertainty over the timing of any sales recovery. The broker's analysts are positive on the motorhome rental company's achievement in maintaining or lifting revenue per vehicle, they tell clients in a note that the industry environment remains challenging. They see the withdrawal of its fiscal 2026 net profit target as understandable, but the heightened uncertainty prompts them to apply a 20% risk-weight to their valuation multiple. Wilsons cuts the stock's target price 10% to A$1.90 and lowers its recommendation to marketweight from overweight. Shares are up 1.6% at A$1.86. (stuart.condie@wsj.com)

0226 GMT - Those disappointed by NextDC's fiscal 2025 outlook might want to remember that the Australian data-center operator is typically conservative with guidance, Goldman Sachs analysts say in a note. They point out that the ASX-listed company has beaten its annual Ebitda guidance by an average 2.8% over the past five years. NextDC's fiscal 2025 Ebitda guidance is about 4% short of where the GS analysts had thought it would land. GS has a A$19.00 target price and a buy rating on NextDC. The stock is down 3.9% at A$17.12. (stuart.condie@wsj.com)

0221 GMT - Karoon Energy has little room for error if it wants to meet its annual production guidance, says Citi. Karoon says it won't proceed with the SPS-88 well intervention in Brazil in 3Q, delaying the action to next year instead. In a note, analyst James Byrne says Karoon is at risk of guidance downgrades if there are minor unplanned operational issues at its assets, given that output is already tracking toward the bottom end of the company's target range for 2024. "Nonetheless, expectations are already quite low and the equity looks cheap against our outlook for cash flows," says Citi, which has a buy call on the stock. (david.winning@wsj.com; @dwinningWSJ)

0206 GMT - Nib's FY 2024 result shows claims growth in Australia and New Zealand has spiked, looking to put an end to the previously benign claims environment, says Morgans analyst Richard Coles in a note. In Nib's core Australian residents health insurance unit, the company reported claims per policy unit growth (+5.7%) at the high end of management's long-term target range (+4%-6%). "Clearly there is a return to a normal claims environment occurring in ARHI, after some benign claims years, with management aiming to price to keep inside their net margin target range from here," says Morgans. Still, the broker reckons there has been some value re-emerge in what is a quality business and keeps its add call on Nib. (alice.uribe@wsj.com)

0201 GMT - APA's disappointing distribution guidance may be a harbinger of things to come, suggests RBC Capital Markets. APA today signaled an FY 2025 distribution of A$0.57/share. While that's up 1.8% compared with FY 2024, it is below consensus expectations of 3.6% growth. "We believe the dividend growth will be muted going forward due to APA's high growth capex expectations over the near-medium term, and ongoing technology transformation costs," analyst Gordon Ramsay says in a note. (david.winning@wsj.com; @dwinningWSJ)

0148 GMT - Woodside's Sangomar oil field in Senegal is off to a strong start, but Goldman Sachs has concerns over the project that are beyond the Australian company's control. Analyst Henry Meyer cites the risk of potential royalty changes for the asset among reasons why it's neutral-rated on Woodside. Sangomar comprises 14% of GS's net asset value for Woodside and Meyer notes the Senegalese government has reiterated its intention to renegotiate oil contracts. Woodside is down 1.0% at A$27.14. (david.winning@wsj.com; @dwinningWSJ)

0136 GMT - APA's distribution and earnings guidance underwhelms the market, with the pipeline operator's stock down 1.5% at A$7.82. APA projected underlying Ebitda in FY 2025 at A$1.96 billion-A$2.02 billion. At the midpoint that represents a miss of 1.3% to UBS's A$2.017 billion forecast. While UBS was spot on with a forecast A$0.57/share distribution in FY 2025, consensus expectations were more bullish. In a note, analyst Tom Allen adds that APA's capex outlook over the next 2-3 years indicates higher spending than expected. UBS has a neutral call on APA's stock. (david.winning@wsj.com; @dwinningWSJ)

0126 GMT - MST Marquee analyst Craig Woolford sees bright spots in Aussie grocer Woolworth's annual result. He says Woolworths's 4Q comparable sales growth of 1.3% in its main Australian food business was slightly ahead of key competitor Coles. A special dividend, reflecting proceeds from the sale of Woolworths's stake in drinks company Endeavour, is also likely to please shareholders, and prospects for FY 2025 indicate modest growth. That's all somewhat outweighed by a weak 2H in the company's New Zealand food unit and Big W discount department store chain. Still, investors seem moderately happy for now, with Woolworths stock up 1.2% recently to A$35.90/share. (mike.cherney@wsj.com; @Mike_Cherney)

0126 GMT - MST Marquee analyst Craig Woolford sees bright spots in Aussie grocer Woolworth's annual result. He says Woolworths's 4Q comparable sales growth of 1.3% in its main Australian food business was slightly ahead of key competitor Coles. A special dividend, reflecting proceeds from the sale of Woolworths's stake in drinks company Endeavour, is also likely to please shareholders, and prospects for FY 2025 indicate modest growth. That's all somewhat outweighed by a weak 2H in the company's New Zealand food unit and Big W discount department store chain. Still, investors seem moderately happy for now, with Woolworths stock up 1.2% recently to A$35.90/share. (mike.cherney@wsj.com; @Mike_Cherney)

0124 GMT - Any short-term dip in NextDC shares on the data-center operator's softer-than-expected fiscal 2025 guidance are for buying, according to RBC Capital Markets analyst Jonathan Atkin. He tells clients in a note that the mid-point of NextDC's met revenue guidance is about 6% short of where he thought it would be, with higher-than-anticipated capex resulting in an Ebitda guidance mid-point about 8.4% lower than his prior forecast. Nonetheless, Atkin sees the macro backdrop as favorably as ever, citing active and broadening hyperscale expansion, plus M&A interest in Australian assets. RBC has an outperform rating and A$21.00 target price on the stock, which is down 3.2% at A$17.25. (stuart.condie@wsj.com)

0118 GMT - The head of Fortescue's metals business, Dino Otranto, strikes a confident tone on the future for so-called green iron. Fortescue is building a $50 million plant in Australia to produce iron with hydrogen made using renewable energy, instead of coal. Fortescue reckons China has "insatiable demand" for green products, which is "why we are putting so much effort into our green iron plant," Otranto tells analysts and reporters on a call. "We are really doubling down on green iron" and "within a year you will see us making further announcements" about the next stage of green-iron development in Australia and potentially elsewhere in the world, he says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0112 GMT - Guzman Y Gomez's bright start to fiscal 2025 suggests potential for the Australian fast-food operator to better its prospectus forecasts, Wilsons analysts write in a note. They tell clients that they are keeping their fiscal 2025 forecasts broadly in line with those in the company's IPO prospectus, but that 7.4% same-store sales growth over the first seven weeks of the new fiscal year suggest an upside bias. They point out that new store development costs have stabilized and that restaurant margins could widen on sales momentum and slowing inflation across key costs. Wilsons raises its target price 29% to A$41.14, on a 25% premium to its discount cashflow valuation. Shares are down 3.6% at A$35.67. (stuart.condie@wsj.com)

(MORE TO FOLLOW) Dow Jones Newswires

0106 GMT - Australia-based travel agency Flight Centre says that it continues to target a 2% underlying profit margin. But Jefferies analysts Michael Simotas and Naveed Fazal Bawa point out that the language has appeared to soften, with Flight Centre referring to the FY 2025 timeframe for the margin target as a "stretch." The Jefferies analysts say they are assuming a margin of 1.8% in FY 2025. More broadly, they say the travel agency's annual results were in line with pre-announcement guidance. The company reported a A$320 million underlying pretax profit for the 2024 fiscal year, a 131% rise on the prior year as the travel business continued its post-Covid recovery. Flight Centre shares were up 1.4% in recent trade at A$19.60. (mike.cherney@wsj.com; @Mike_Cherney)

0055 GMT - Fortescue's FY 2024 underlying profit misses market estimates by 6% because of higher-than-expected depreciation, amortization and interest expenses, says Barrenjoey analyst Glyn Lawcock. Annual depreciation and amortization is about US$300 million above consensus and the interest expense roughly US$70 million higher, Lawcock says. The miner's FY Ebitda is largely in line with expectations while its dividend is 2%-4% above expectations, he adds. Fortescue is up 0.5% at A$18.72/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0046 GMT - When asked on a media call what the biggest challenge is for Australian supermarkets going forward, Woolworths CEO Brad Banducci says it's "value for money." In posting its annual results, the grocer says it recently lowered prices to boost sales momentum and attract customers who are still very concerned about costs of living. "We just need to do more for the customer on value," Banducci says. He highlights how young singles and couples, who are struggling with increasing rents, have changed their shopping behavior recently. Although supermarkets have been facing increased political pressure for raking in high profits, Banducci says other factors like housing costs are driving cost-of-living pressures for consumers. (mike.cherney@wsj.com; @Mike_Cherney)

2359 GMT - Australian private health insurance companies can be a relative safe haven in tough economic conditions, but investment signals remain conflicted, say Macquarie analysts in a note. Regulator data on the industry for the June quarter is impacted by new accounting standards and participation data could be distorted upwards, they say. On a company basis, Macquarie maintains its neutral recommendation for NIB and Medibank. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

August 28, 2024 01:00 ET (05:00 GMT)