0507 GMT - Westgold Resources gets a new bull at Euroz Hartleys ahead of what is set to be a significant drop in costs for the enlarged gold miner. Raising his recommendation to buy from hold, analyst Kyle de Souza says that Westgold is unrecognizable compared with two years ago, prior to its merger with Karora Resources. He tells clients in a note that organic growth across key assets will drive the next stage of the company's growth. He sees lower fiscal 2026 costs driving what he calls a step change in Ebitda and free cash flow. Euroz Hartleys raises its target price by 30% to A$2.85. Shares are up 0.6% at A$2.695. (stuart.condie@wsj.com)

0340 GMT - Australian supermarket operator Coles gets a new bull at Bell Potter on the expectation that high levels of cash generation will support dividend growth. Initiating coverage of the stock, analyst Jonathan Snape tells clients in a note that Australia's second-largest supermarket chain has achieved average annual dividend growth of 4.2% since FY 2020, against a backdrop of 3.7% average annual earnings growth. He forecasts 9.1% annual compound earnings growth to FY 2027, and points out that capital expenditure has already peaked. Bell Potter places a buy rating and A$21.55 target price on the stock, which is up 0.4% at A$19.265. (stuart.condie@wsj.com)

0321 GMT - Computershare loses its bull at Morgan Stanley following the Federal Reserve's big interest-rate cut. The investment bank's analysts write in a note that it will be tough for the share-registry provider to outperform against a backdrop of falling global rates, while the slow recovery in corporate activity highlights further risk that consensus forecasts might be too high. They cut their forecasts for so-called management EPS, a key indicator of performance, by 2% for fiscal 2026 and by 4% for fiscal 2027. MS cuts its target price on the stock by 7.7% to A$27.70 and lowers its recommendation to equal-weight from overweight. Shares are down 2.85% at A$25.405. (stuart.condie@wsj.com)

0255 GMT - Higher-than-expected corporate costs leave Morgan Stanley's proforma valuation of Webjet's soon-to-demerge business and consumer units slightly lower than its current target price. MS analysts write in a note that the A$8.1 million dissynergy from the impending demerger is higher than they had estimated, as are one-off costs of A$12.2 million. That said, they see scope for shares in the business-to-business unit, which accounts for the bulk of the combined valuation, to rerate materially following the demerger. They offer proforma valuations of A$7.00/share for the B2B unit and A$0.65/share for B2C. MS has a A$8.15 target price and equal-weight rating on Webjet ahead of the demerger. Shares are up 3.0% at A$8.31. (stuart.condie@wsj.com)

0135 GMT - Domino's Pizza Enterprises' bull at Jefferies expects the Australian fast-food franchiser to make more changes to address weak sales in its more challenging markets. Analyst Michael Simotas says that the ASX-listed company has done well to quickly close stores that it had opened on what turned out to be unsustainable Covid-driven demand. He tells clients in a note that the current focus on unit economics is the right way to go. He reckons that planned closures are almost done, with 3% of the global network shutting so far in fiscal 2025, and continues to see significant upside. Jefferies has a buy rating and A$44.00 target price on the stock, which is up 3.2% at A$32.51. (stuart.condie@wsj.com)

0015 GMT - Regis Health Care's bulls at Jefferies get even more positive on the aged-care provider's outlook amid Australian government sector-funding changes. Subsidies are rising by 10% on year and analysts Vanessa Thomson and David Stanton also think that proposed aged-care legislation should lead to higher government revenue from fiscal 2026. The legislation should pass into law without significant modifications, they say in a note to clients. They raise their EPS forecasts by 11% for FY 2026, by 21% for FY 2027, and by 39% for FY 2028. Its target price rises 27% to A$6.75 and Jefferies keeps a buy rating on the stock. Shares are up 0.9% at A$5.88. (stuart.condie@wsj.com)

2324 GMT - Sims's upbeat update on its North America Metal business shows a turnaround in earnings well ahead of expectations, says Jefferies analyst Simon Thackray. Jefferies upgrades its FY 2025 Ebit forecast for that division to A$105 million from A$24 million "on the back of a material improvement [in] conditions we did not expect until late FY26." Yet the bank remains cautious on Sims's recovery from an earnings trough given ongoing headwinds in Asia. Pressure on earnings in the company's Australia and New Zealand Metal business "should now be the focus," Thackray says. Shares in Sims ended Thursday at A$12.40 after a 12% jump. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0535 GMT - Equity gains could broaden out after the Fed's rate cut, with growth stocks, particularly in the technology sector expected to rise further, says UBS Global Wealth Management Chief Investment Office in a note. "Within tech, we expect AI to be a key driver of equity market returns over the coming years and recommend strategic exposure to this theme," it says. Investors could use tech sector volatility, which could rise in the months ahead on cyclical and geopolitical risks, to build long-term exposure to AI at more favorable prices, it suggests. UBS maintains its base case for 100 bps of Fed easing in 2024. As returns on cash are eroded, investors should consider investing in high-quality corporate and government bonds, it adds. (monica.gupta@wsj.com)

(END) Dow Jones Newswires

September 20, 2024 01:10 ET (05:10 GMT)