0149 GMT - Michael Hill International's strong start to its new fiscal year suggests that the Australian jeweler's brand overhaul and promotions are resonating with consumers, Macquarie analysts say. They tell clients in a note that while there are obvious near-term challenges from volatile trading conditions and lingering cost pressures, Michael Hill's operating momentum in all its geographies should significantly improve over fiscal 2025. They temper the trajectory of their margin recovery forecasts to reflect the aforementioned challenges, but keep an outperform rating on the stock. Macquarie trims its target price by 9.9% to A$0.73. Shares are flat at A$0.54. (stuart.condie@wsj.com)

0138 GMT - Recent Australian banking industry feedback suggests there may be early signs mortgage competition is picking up again, say Morgan Stanley analysts in a note. While Reserve Bank of Australia data show discounting on new loans was stable in June, MS says it has heard from industry participants that NAB has removed its 'premium' to peers in response to weaker volume growth and Westpac has reversed a decision to reduce discounts. At the same time, CBA CEO Matt Comyn recently said some players have started to "ratchet up discounting again," says MS. It adds that deposit competition between banks remains benign. (alice.uribe@wsj.com)

0124 GMT - Now that there is more certainty on the net sale proceeds of Perpetual's trust and wealth units, Morgan Stanley analysts say they have greater confidence in the valuation of the Australian financial company's investments division. In a note, MS says that the unit is in line with traditional asset manager peers. The investment bank stays equal weight on the stock, as it awaits the new CEO's strategy, but cuts its target price by 8% to A$20.60, given Perpetual's higher cost guidance. The stock is down 0.7% at A$19.46. (alice.uribe@wsj.com)

2343 GMT - Business unit pre-provision returns at major Australian lenders have improved around 10%-40% since FY 2019, led by Commonwealth Bank, say Macquarie analysts in a note. Conversely, NAB looks to have lagged behind its peers despite delivering superior lending growth, driven by its starting underweight position in deposits. Overall, however, Macquarie reckons business banking returns across the majors are at or close to peak levels, expecting returns to decline. This is even as banks allocate more resources and capital to business banking. It sees NAB as being more resilient than peers, and reckons ANZ and Westpac have the weakest earnings growth outlook in business banking. (alice.uribe@wsj.com)

2331 GMT - Data trends support the recent decision by Life360 management to upgrade the tracking app provider's outlook, Jefferies analysts tell clients in a note. They point out that Life360's ranking on the Apple store has risen to No. 5 from No. 6 or No. 7 prior to the company's dual listing in the U.S. in June. Its trends on Google have also continued to improve across all key geographies, they add. Last month, Life360 said it expects annual revenue of US$370 million-US$378 million, up from US$304.5 million in 2023. Jefferies has a buy rating and A$21.50 target price on Life360's Australia-listed securities. Shares are at A$18.90 ahead of the open. (stuart.condie@wsj.com)

2319 GMT - FY 2024 likely represents a high watermark for jeweler Michael Hill International's cost base, according to Citi. It estimates Michael Hill's cash cost of doing business will rise by around 1-2% in FY 2025, below top line growth of 2.5%. Analyst James Wang says Michael Hill can make savings on labor costs by optimizing its roster, while also stripping out corporate and tech costs. "However, we think given the nature of Michael Hill's business, there is less flexibility in rostering changes than some other discretionary retailers," Citi says. It retains a neutral call on Michael Hill's stock. (david.winning@wsj.com; @dwinningWSJ)

2313 GMT - REA Group's interest in Rightmove makes a good deal of sense to Jefferies analysts despite challenges facing the U.K. property advertiser. The analysts point to competitive threats and unhappiness by agents at Rightmove's pricing as potential concerns for Australia's REA. However, Rightmove's strong margins, the prospect of 10-14% EPS accretion and expansion into adjacent U.K. verticals all look attractive, they tell clients in a note. They add that REA's majority shareholder, News Corp., also owns two major U.K. newspapers. That could support marketing. Jefferies has a hold rating and A$222.40 target price on REA, which is at A$207.44 ahead of the open. News Corp. owns Dow Jones & Co., publisher of this newswire and The Wall Street Journal. (stuart.condie@wsj.com)

2311 GMT - Citi highlights a split in market views over whether FY 2025 may be a lower growth year for Goodman. At the heart of that debate is whether growth from Goodman's industrial property portfolio isn't strong enough before Goodman's data center developments come online. Citi doesn't agree. "In our view FY 2025 remains a strong underlying EPS growth year supported by data center and industrial development earnings that are recognized on a stage of completion basis," analyst Howard Penny says. Citi tips underlying EPS to grow by 12.9% in FY 2025, above Goodman's maiden guidance of a 9% rise. "In our view the market may be underappreciating the timing of data center revenue recognition which varies and is recognized before completion of the data center pipeline," Citi adds. (david.winning@wsj.com; @dwinningWSJ)

2249 GMT - Genesis Minerals's has estimated all-in sustaining costs from its Australian operations in FY 2025 at A$2,200-A$2,400/oz of gold, but Shaw & Partners is being a tad more conservative with its forecasts, at least for now. Analyst Peter Kormendy pegs Genesis's AISC at A$2,472/oz, preferring to upgrade this through the year. "Our forecast has Leonora producing at AISC A$2,376/oz and Laverton at A$2,904/oz in its first year of operation," Shaw says. "We have left FY 2026 and beyond forecasts unchanged for now." Shaw has a buy call and A$2.80/share price target on Genesis, which ended Monday at A$2.20. (david.winning@wsj.com; @dwinningWSJ)

2241 GMT - Boss Energy continues to lift output from its Honeymoon uranium mine, but Jefferies notes the costs involved remain unclear. Boss produced 57,000 lbs of U308 in FY 2024, and is targeting 850,000 lbs in FY 2025. "Given the actual cost of production will not be known until the plant is operating at commercial production throughput, it is difficult to gauge the commercial success of the project restart," analyst Mitch Ryan says. As Boss transitions to a producer, Jefferies says the focus will be on leveraging earnings from its projects to invest more in growth. "This is likely through further expansions at Honeymoon up to its permitted 3.3 million lbs per annum, further inorganic M&A in North America, or strategic building or selling of inventories," Jefferies says. (david.winning@wsj.com; @dwinningWSJ)

2235 GMT - Aeris Resources's balance sheet is tight but options are emerging, says Jefferies. Analyst Daniel Roden highlights an "achievable" pathway for Aeris's Barbara and Constellation projects through operating cash flows, refinancing debt and offtake financing. That could happen outside of funding other developments, such as a restart of the Jaguar operation, Jefferies says. "Our strong copper deck (US$6.00/lb by 2027) sees these projects comfortably funded," Jefferies says. "Consensus copper pricing would require additional debt or external funding." The current copper price of US$4.18/lb could challenge funding options if it's sustained, adds the bank, which has a hold call on Aeris. (david.winning@wsj.com; @dwinningWSJ)

0623 GMT - REA Group's potential acquisition of U.K. counterpart Rightmove looks risky to Citi analyst Siraj Ahmed given increased competition in U.K. residential property advertising. Ahmed also believes there is higher execution risk for REA on any takeover due to the different market structures in play in Australia and the U.K. He sees potential for REA to add strategic value through expansion of Rightmove's capabilities into commercial and mortgages, but warns that REA has a mixed track record of success in international M&A. Citi has a buy rating and A$230.00 target price on REA shares, which traded ex-dividend and closed 5.3% lower at A$207.44. REA is 61% owned by News Corp., which owns Dow Jones & Co., the publisher of this newswire and The Wall Street Journal.(stuart.condie@wsj.com)

(END) Dow Jones Newswires

September 03, 2024 01:00 ET (05:00 GMT)