0424 GMT - Seven West Media's A$2.7 billion long-term commitment for programming rights looks like a risk to shareholder equity for a company valued at just A$270 million, Morgan Stanley analyst Andrew McLeod writes in a note. He stresses that it's not the primary reason for his continued bearish stance on the stock, but thinks that a commitment of that size warrants more attention. The payments will weigh on any unexpected medium-term profitability Seven West generates, he adds. McLeod's concerns are based on the media conglomerate's high operating leverage in a weak advertising market and its rising debt load. MS cuts its target price 27% to A$0.16 and keeps an underweight rating on the stock, which is flat at A$0.175. (stuart.condie@wsj.com)

0358 GMT - Higher Australian bulk-billing rates could help Healius generate the volumes it needs to see growth in its pathology business, Jefferies analysts say in a note. They point out that higher GP bulk-billing rates typically reduce the payment burden on patients, encouraging people to visit their doctor and in turn leading to higher clinical-lab volumes. The analysts tell clients they will be watching for fiscal 2025 pathology volume growth even more closely after Healius agreed to sell its Lumus Imaging subsidiary to private equity. Jefferies cuts its target price 2.8% to A$1.75 and keeps a hold rating on the stock, which is up 5.1% at A$1.6925. (stuart.condie@wsj.com)

0139 GMT - REA's bull at Citi has heard that the Australian real-estate advertiser's U.K. opportunity could be via speeding up home sales. With REA trying to buy the Rightmove platform, analyst Siraj Ahmed tells clients in a note that deploying its domestic tool set could reset what a former manager at the U.K. business says is a strained relationship with agents. Citing this former manager, Ahmed says that Rightmove could essentially partner with agents, leveraging its existing Australian products. Citi has a buy rating and A$230.00 target price on REA shares, which are down 0.4% at A$198.11. REA is 61% owned by News Corp, which also owns Dow Jones & Co., the publisher of Dow Jones Newswires and The Wall Street Journal. (stuart.condie@wsj.com)

0119 GMT - Macquarie analysts expect Australian banks' institutional earnings to decline by between 10% and 20% over the next three years. The reckon that institutional earnings have peaked and that impairments, lower markets and trading income, and falling interest rates will result in pressure from hereon. They expect the banks to generate institutional returns of about 9%-11% over the medium term, compared with current returns in the mid-teens. ANZ is likely to be more impacted than its peers early in the rate-cutting cycle due to its greater reliance on U.S. rates and bigger transactional banking capabilities, they add. (stuart.condie@wsj.com)

0112 GMT - Select Harvests has scored another own goal with the elevated debt level that has forced the almond farmer into an emergency capital raise, Ord Minnett analyst John Lawlor tells clients in a note. Lowering his recommendation on the stock to hold from buy, Lawlor tells clients that the company had A$75 million more debt than it had guided for due to what it said were freight delays. He is especially frustrated with the weakness of Select Harvests' trading update given that it comes at a time when volumes, quality and prices are all shifting in the company's favor. Ord Minnett cuts its target price 16% to A$4.35 as it waits for evidence of improved execution. Shares are down 16.5% at A$3.70. (stuart.condie@wsj.com)

0106 GMT - Select Harvests loses its bull at Wilsons following the almond farmer's disappointing trading update and new equity raise. The Australian broker's analysts tell clients in a note that the A$80 million equity raise derisks the company's balance sheet but is dilutive. Select Harvests' FY 2024 earnings guidance is at the lower end of analyst expectations despite higher almond prices, they add. There is little change to their earnings forecasts through FY 2025, but they lower their Ebit expectations for FY 2026 by 7%. Wilsons cuts its target price 17% to A$4.57 and lowers its recommendation to market weight, from overweight. Shares are down 16% at A$3.705 after emerging from a trading halt. (stuart.condie@wsj.com)

IDP Education's bear at Jefferies sees Canada's tightening of caps on study permits for 2025 as putting more pressure on the student-placement provider's outlook. Analyst Wei Sim says Canada's decision to cut the number of permits it issues by 10% reaffirms his view that average analyst forecasts are too optimistic over the medium term. He tells clients in a note that tighter restrictions in Canada and elsewhere are not temporary, and says his revised adjusted EPS expectations for fiscal 2025 through fiscal 2027 are 3-23% lower than the analyst average. Jefferies keeps an underperform rating and A$13.00 target price on the stock, which is at A$15.50 ahead of the open. (stuart.condie@wsj.com)

(END) Dow Jones Newswires

September 23, 2024 01:00 ET (05:00 GMT)