0130 GMT - Wilsons says it's likely to raise its price target on Strike Energy after the Erregulla Deep-1 exploration well found natural gas. Strike said it made two "highly significant" discoveries with an aggregate 28 meters on net gas pay at depths never previously encountered in the Perth Basin of Western Australia. Analyst James Karakatsanis says reservoir quality and quantity seem sufficiently attractive and initial results indicate a sizeable find. "We think this discovery is an important positive catalyst for Strike's share price and could be another value accretive asset to their portfolio of assets," says Wilsons, which has an overweight call on the stock. (david.winning@wsj.com; @dwinningWSJ)

0111 GMT - GrainCorp looks like an even stronger bet to its bull at Bell Potter following upgraded winter crop forecasts for Australia's east coast. Analyst Jonathan Snape raises his fiscal 2025 net profit forecast for the company by 7% to A$146.2 million on the improved projection by government forecasters, noting that the official outlook has underestimated final crops by an average of 10% over the past five years. Snape reckons that average analyst forecasts for fiscal 2025 look conservative, and raises his target price on the stock by 3.0% to A$10.20. Bell Potter retains a buy rating on shares, which are down 1.1% at A$8.82. (stuart.condie@wsj.com)

0051 GMT - Eagers Automotive looks well placed to beat analysts' 2024 profit expectations, according to its bull at Bell Potter. Analyst Chris Savage tells clients in a note that the average analyst forecast of a A$363 million pre-tax profit would require Eagers' 2H core profit margin to fall to 2.9% from 3.4% in 1H. He reckons this is unlikely given Eagers' recent comment that July and August's margins were not materially different to those in the June half. Savage expects the vehicle dealer to report a 2H pre-tax profit slightly higher than the A$183 million recorded in 1H. Bell Potter keeps a buy rating and A$13.00 target price on the stock, which is down 0.7% at A$10.68. (stuart.condie@wsj.com)

0024 GMT - The price fetched by Orora for its North American packaging solutions business looks decent to Citi. Orora has agreed to sell the OPS business to Veritiv for A$1.775 billion, generating net proceeds of A$1.69 billion. "Following the sale, we estimate Orora is trading on a 8x enterprise value-to-Ebitda post-divestment basis, which is largely equivalent to the 7.7x paid for Saverglass and 8x pre-deal multiple," analyst Samuel Seow says. "However, we estimate the overall quality of the business is improved, but will require execution to realize." (david.winning@wsj.com; @dwinningWSJ)

The latest crop report in Australia bolsters Ord Minnett's bullish view of GrainCorp's stock. Government forecaster ABARES has upgraded its 2024-2025 winter crop estimate by 7.6% to 55.2 million tons, which would be the fifth-largest crop recorded in the country. In response, Ord Minnett lifts its FY 2025 Ebitda forecast by 2% to A$340 million. "Overall, Ord Minnett's investment thesis remains intact and we continue to hold the view that the through-the-cycle earnings and GrainCorp's port assets remain undervalued by the market," says analyst John Lawlor. "This valuation discount coupled with strong FY 2025 earnings and the potential for further capital management initiatives represents an attractive opportunity for incoming investors." (david.winning@wsj.com; @dwinningWSJ)

0017 GMT - Jumbo Interactive loses its bull at Macquarie on the slow pace of the lottery ticket retailer's earnings diversification strategy. Jumbo's reseller agreement with Lottery Corp, which contributes about 80% of group earnings, isn't due for renewal until 2030 but the Macquarie analysts are concerned at the pace at which Jumbo's managed services M&A strategy is gaining traction. They tell clients in a note that underlying growth prospects from Jumbo's three acquisitions since 2019 are low. They risk-weight the Australian lotteries reseller renewals at 75%, lowering their target price by 15% to A$14.75. Macquarie cuts its recommendation to neutral from outperform. Shares are down 1.9% at A$13.74. (stuart.condie@wsj.com)

0007 GMT - The market appears to have missed the structural change in Hansen Technologies' organic growth outlook, says Goldman Sachs, upgrading the stock to buy from neutral. It thinks Hansen should be able to increase annual sales at a sustainable rate of 5%-7% into the medium term, and potentially faster if it lands large contracts. Hansen is trading at a 10% discount to its historical average enterprise value-to-Ebitda multiple, the bank adds. Hansen ended Tuesday at A$4.24, well below Goldman's new A$5.10/share price target. (david.winning@wsj.com; @dwinningWSJ)

0004 GMT - Goldman Sachs is increasingly confident about Gentrak's growth outlook. It highlights expectations of compound annual growth of 23% in core revenue during FY 2023-2026. "We see possible upside in November with management's track record of upgrading and beating guidance, alongside flat 2H growth assumptions implied by FY 2024 guidance," analyst Chris Gawler says in a note. Potential upside in FY 2025 could come from upgrading more customers to its g2.0 product, success in its international strategy, and expansion into new markets via M&A, suggests GS. (david.winning@wsj.com; @dwinningWSJ)

2356 GMT - Ampol is lifted to buy from hold by Jefferies after its share price sharply underperformed the benchmark S&P/ASX 200 index over the past month. In a note, analyst Michael Simotas highlights that Ampol's Convenience Retail business is solid, its retail fuel margin is supportive and its Fuels & Infrastructure Australia business relatively resilient. "Management has done a good job of what it can control and capital allocation has been sound," Jefferies says. "Refining weakness will likely persist for some time, but we are inclined to look through the cycle, noting refining margin weakness has created buying opportunities historically." (david.winning@wsj.com; @dwinningWSJ)

2354 GMT - Jefferies questions whether pricing will become a drag on packaging company Amcor's profits. Analyst Richard Johnson points out that increases to Amcor's average prices outpaced growth in its costs over the past four years, and helped offset the impact of lower volumes on earnings within its Flexibles business. Product mix, particularly in packaging for healthcare products, also appeared to help, Jefferies says. For Amcor, those benefits peaked in 1H of FY 2024. Jefferies says only a very tight cost control program kept profits from being materially lower that year. "In FY 2025 price may remain a headwind but this should be comfortably offset by volume growth," the bank says.(david.winning@wsj.com; @dwinningWSJ)

2330 GMT - Brambles keeps its bull at UBS, where analyst Andre Fromyhr sees more value as investors grow more confident in the sustainability of the global pallet giant's stronger free cashflow. Fromyhr tells clients in a note that the upcoming Sept. 12 investor day could act as a stock catalyst, with the medium-term outlook for growth and returns potentially up for discussion. He adds that lingering pallet availability issues continue to support premium pricing by Brambles's CHEP businesses. UBS keeps a buy rating and A$19.10 target price on the stock, which is at A$18.17 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

September 04, 2024 01:02 ET (05:02 GMT)