0403 GMT - NextDC's bull at Macquarie likes the data-center operator's decision to internally segment its business to specifically address demands of different customer types. The investment bank's analysts see the move as sensible and reckon that it improves their ability to win larger hyperscale contracts. They lower their Ebitda forecasts through fiscal 2028 on higher operating costs and higher capital expenditure, but raise their fiscal 2029 forecast by 9%. Their target price is largely unchanged at A$21.20 and they keep an outperform rating on the stock. Shares are down 2.3% at A$16.665. (stuart.condie@wsj.com)

0338 GMT - Nine Entertainment's market share gains from its broadcast of the Olympics was far lower than Macquarie analysts had expected. While acknowledging the difficulty in making precise calculations from revenue data, they reckon that the Australian media conglomerate lifted its TV market share in the current fiscal half by 430 basis points on a year earlier. This compares with their prior expectation of a rise of more than 800 basis points. They also say that Nine has more work to do in extracting incremental costs. Macquarie cuts its target price by 3.9% to A$1.24 and keeps a neutral rating on the stock. Shares are up 0.7% at A$1.36. (stuart.condie@wsj.com)

0323 GMT - Nine Entertainment looks attractively priced to UBS analyst Lucy Huang despite her conservative assumptions about the short-term health of Australia's media ad market. Huang maintains her conservative stance on the trajectory of any ad recovery amid weak consumer confidence and data showing a 10% on-year contraction in metropolitan free-to-air TV markets in July. She tells clients in a note that the media conglomerate is confident that total TV revenues will rise across the fiscal year and sees potential for the stock to rerate as conditions improve. UBS cuts the stock's target price 7.7% to A$1.80 and maintains a buy rating. Shares up 1.1% at A$1.365. (stuart.condie@wsj.com)

0207 GMT - NextDC's bull at Morgans expects the Australian data-center operator to firm up long-dated contracts with large-demand customers over the next 12-18 months. Analyst Nick Harris tells clients in a note that management has flagged advanced discussions with individual customers with 100MW of options. He warns that complex negotiations over large and long-dated contracts can take years but expects to see progress by some time in NextDC's 2026 fiscal year. NextDC's sales pipeline is bigger than ever and still growing, he adds. Morgans trims its target price by 2.4% to A$20.50 and keeps an add rating on the stock. Shares are down 3.2% at A$16.50. (stuart.condie@wsj.com)

0204 GMT - Red 5's wide miss on FY 2025 guidance at the Deflector mine--where gold output is forecast to fall 28% year-over-year and costs are forecast to be 61% higher--concerns RBC Capital Markets analyst Alex Barkley. "We already expected a considerable slow-down in year-on-year gold production, but this forecast missed even our estimate," he says. The miner's FY 2025 gold output guidance is 11% below RBC's estimate and cost guidance is 48% higher. Reassuringly, Red's most valuable site, KOTH, is roughly in line with RBC estimates and flat year on year, Barkley says. Red 5 is down 9.6% at A$0.33/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0151 GMT - Perpetual's FY 2024 results are in line with Citi forecasts and slightly ahead of consensus but seem to be of relatively lower quality, the investment bank's analysts say in a note. The Australian financial company's dividend is also substantially lower than both Citi's and consensus forecasts. "There is a new expense savings target which is positive but, at the same time, 1H FY 2025 expenses seem to be guided to slightly higher growth than we currently forecast," says Citi. There is a "a lot to absorb" in the results, it says, expecting the stock to move sideways or down. Perpetual falls 3.3% to A$19.96. (alice.uribe@wsj.com)

0141 GMT - NextDC investors don't have much longer to wait until the data-center operator's increased scale brings improved operating leverage, Wilsons analysts write in a note. They tell clients that the Australian company has flagged accelerating operating leverage from fiscal 2026 as orders are converted, with fiscal 2025's capital expenditure effectively underwriting growth in fiscal 2027 and beyond. Wilsons trims the stock's target price by 2.6% to A$18.90 but maintains an overweight rating, with the broker's analysts calling the medium-term outlook "very robust". Shares are down 3.2% at A$16.50. (stuart.condie@wsj.com)

0140 GMT - Copper miner Sandfire's FY 2025 guidance "looks better than feared," with capital expenditure plans below expectations and operating expenditure estimates mixed, UBS analyst Levi Spry says in a note. "Assets delivering and looks attractive on potential higher copper prices medium-term, but spot copper trades below the streets forecasts," Spry says. UBS has a neutral rating and A$9.40/share target on Sandfire, which is down 2.5% at A$8.60/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0138 GMT - A big takeaway from Woodside's annual results commentary for Jarden was a sense that it can maintain an 80% dividend payout ratio. Analyst Nik Burns points to commentary in Woodside's results presentation about its continued capacity to pay strong dividends, while management said on a call that it assumes a payout ratio at the top end of its 50%-80% of underlying profit target, even at stress case pricing. Burns says these signals combined with Woodside's comfort on exceeding 20% gearing. Still, Jarden isn't sure Woodside's bullishness is well founded. It sees gearing peaking at 25% in 2026 and remaining around this level through 2027-2028. "We see risks at such a high level of gearing through a period when LNG pricing may soften," Jarden says. "Our forecasts continue to reflect a 65% payout ratio." (david.winning@wsj.com; @dwinningWSJ)

0131 GMT - Perpetual's higher FY 2025 guidance for cost growth versus consensus and Jarden's estimates, will be in focus following the release of the Australian financial company's FY 2024 results, say Jarden analysts in a note. Investors will also be keen to hear more on cost rationalization plans, and low trajectory given impairment earlier this week. For the FY 2024 result, Jarden sees that earnings per share were robust when compared with Jarden estimates and consensus, with net cash proceeds of A$0.96-A$1.12 billion broadly in line with its estimates. (alice.uribe@wsj.com)

0128 GMT - The US$200 million buyback announced by South32 following the sale of its Illawarra Metallurgical Coal business is bigger than anticipated, says RBC Capital Markets analyst Kaan Peker, who had forecast US$150 million to be set aside. The miner's guidance is mixed, says Peker, with FY 2025 unit cost estimates marginally higher than RBC expected. Capital expenditure for FY 2025 is also more than envisaged, which appears to be related to timing at the Hermosa project, Peker says. Otherwise, production forecasts are broadly in line with market consensus, he says. RBC has an outperform rating and A$3.80 target on South32, which is flat at A$3.08/share.(rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0127 GMT - Perpetual's FY 2024 underlying net profit came in around 2% above consensus, say Macquarie analysts in a note, but was 1% below the investment bank's own expectations. Macquarie says the beat was driven by the trust unit, which is currently being sold, as well as distribution income, which was a one-off. The investment bank says that means that it was an around 1%-2% underlying miss for the go-forward business. Additionally, Macquarie sees the net proceeds from the sale of Perpetual's trust and wealth-management units as in line with its expectations, but also that stranded costs are materially above. (alice.uribe@wsj.com)

0115 GMT - South32's underlying FY results are better than expected, including a stronger underlying profit and final dividend versus consensus, says UBS analyst Lachlan Shaw. "Aluminum and copper volume growth to come" in FY 2025-2026, "but costs trending higher too," says Shaw. UBS has a buy rating and A$3.80 target on South32, which is up 0.8% at A$3.105/share.(rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0115 GMT - Karoon Energy's decision to push back the SPS-88 well intervention in Brazil to next year means attention can now turn to drilling progress at the Who Dat operation in the U.S. Gulf of Mexico, Jarden says. Karoon is set to begin drilling the Who Dat South well within weeks, followed by Who Dat West in the December quarter. In a note, analyst Nik Burns emphasizes Karoon is generating strong cash flows from its operations and is on track to be net cash by end-2024. "The Who Dat JV is reviewing opportunities to increase production over the next 6 months, which in our view could see the asset exit 2024 with higher production than the 42,000 barrels of oil/day (gross rate) it achieved at the end of June," Jarden says. It retains a buy call on Karoon. (david.winning@wsj.com; @dwinningWSJ)

0103 GMT - Lovisa loses a bull in Jarden after recent like-for-like sales growth disappointed and the pace of its store rollout underwhelmed. Analyst Ed Woodgate is concerned the operational speed bumps are happening just as the CEO prepares to leave, heightening execution and sentiment risk in the short term. As a result, Jarden moves to neutral from buy, and prefers Universal Store and Accent among Australian retailers. Still, it lays out a pathway to turn bullish once more. That includes evidence of improved same-store sales growth, a reacceleration of its store rollout, a further strengthening in its gross profit margin, and a sufficient cut to consensus forecasts to reflect fewer new stores. (david.winning@wsj.com; @dwinningWSJ)

(MORE TO FOLLOW) Dow Jones Newswires

0101 GMT - There seem to be no major red flags on Australian bank credit quality, with the increase in non-performing loans over the past six months has been similar across the four major lenders, say Morgan Stanley analysts in a note. At the same time they say that underlying loss rates are tracking at around 5-6 basis points, and collective provision coverage remains healthy, citing data which shows the major banks' collective provisions were steady at around A$19.4 billion at June, although coverage edged up by 1 basis point quarter-on-quarter to an average of around 1.38% of credit risk-weighted assets. (alice.uribe@wsj.com)

0056 GMT - When asked on a media call about whether runaway inflation is no longer a risk, Wesfarmers Managing Director Rob Scott is cautious. He says although there are signs that inflation is moderating, "we shouldn't just assume it's going to come down." Energy, transportation, insurance and housing costs are all still elevated, he notes. With consumers worried about the cost of living, Scott says Wesfarmers's retail businesses have needed to keep a relentless focus on everyday low prices. "With the current economic pressure on consumers, the importance of delivering the lowest possible prices in the market cannot be overstated," he says. (mike.cherney@wsj.com; @Mike_Cherney)

0043 GMT - Although E&P analyst Phillip Kimber says Wesfarmers's 2024 annual result was solid, he is concerned about slowing sales momentum at hardware chain Bunnings, the company's main earnings driver. In its outlook, Wesfarmers flagged that sales growth at Bunnings was still positive but had moderated to start the 2025 fiscal year, impacted by a softening in building activity. Given Wesfarmers shares have rallied 18% since the start of July, Kimber says this doesn't appear enough to support the share price at current levels. Investors seem to agree, with Wesfarmers stock down some 2% in recent trade to A$75.63. (mike.cherney@wsj.com; @Mike_Cherney)

0027 GMT - Jefferies analysts Anthony Moulder and Amit Kanwatia are upbeat on Qantas's outlook following the company's annual result. They say flat fuel expenses will provide an offset to weaker international fares, that domestic fares are expected to increase above expectations and that demand for travel remains positive. A newly announced share buyback and a planned return to fully franked dividends in the fiscal second half also highlight management's confidence in the balance sheet, they say. Investors seem cautiously optimistic, with Qantas shares recently up 0.3% in early trade at A$6.34. (mike.cherney@wsj.com; @Mike_Cherney)

(END) Dow Jones Newswires

August 29, 2024 01:20 ET (05:20 GMT)