The latest Market Talks covering Equities. Published exclusively on Dow Jones Newswires throughout the day.
2200 ET - BlueScope Steel is stepping up its capital-management plans and "has upped the ante on efficiency," says Macquarie. The steelmaker's EBIT outlook for 1H FY 2027 is 11% above market expectations, while value-added sales are also strong, it says. The bank reiterates an outperform rating and a A$35.95 target on the stock. The key driver of BlueScope's strong earnings guidance is North America, where a debottlenecking project at North Star is delivering early benefits, says Macquarie. A turnaround of the Buildings and Coated Products North America business is also gaining traction, it says. Shares are down 1.5% at A$33.19. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2156 ET - Food Empire's lower Southeast Asia segment revenue this year isn't due to a structural issue, but rather a strategic shift towards profitability over top-line growth, says DBS Group Research's Zheng Feng Chee in a note. The Singapore-listed instant coffee maker's 2Q Southeast Asia revenue was softer due to its still-scaling Malaysia business, the analyst notes. The company's strong market position suggests this is an appropriate time for Food Empire to prioritize margins, he says, although the segment's sustainability and profitability should still be closely monitored.He trims his 2026-2027 earnings forecasts by 2%-3%. DBS maintains its buy rating and target price of 3.05 Singapore dollars. Shares are up 0.4% at S$2.39. (megan.cheah@wsj.com)
2138 ET - National Australia Bank's bulls at UBS think its full-year credit impairment charges could be lower than expected. Analysts at UBS point out in a note that the lender's expected credit loss charge of 15 basis points included a higher share of specific provisions and lower collective impairments during the June quarter. Based on the run-rate trend suggested by this composition, they reckon NAB's full-year credit loss ratio is likely to be lower than the 16 basis points expected by consensus. UBS has a last-published buy rating on the stock and a target price of 50.00 Australian dollars. Shares are down 3.6% at A$38.98. (stuart.condie@wsj.com)
2119 ET - CelcomDigi could see margins improve in 2H, supported by tighter cost controls and continued operational efficiencies, Hong Leong IB analyst Toh Woo Kim says in a note. Toh is constructive on management's focus on cost discipline, which should support further margin improvement by end-2026. With the stock down significantly over the past year and underperforming the KLCI, he believes the market has more than priced in uncertainties surrounding Malaysia's state-backed 5G infrastructure firm Digital Nasional. At 17.7X forecast 2027 earnings and a 5.3% net dividend yield, he sees an attractive risk-reward profile. Hong Leong maintains a buy rating on CelcomDigi and keeps its target at 3.70 ringgit. Shares are 1.4% higher at 2.88 ringgit. (yingxian.wong@wsj.com)
2109 ET - Maxis' 3Q core earnings per share could grow sequentially, driven by higher revenue and continued cost containment, says CIMB Securities analyst Choong Chen Foong in a note. For 2026, core net profit is expected to rise 4% on year, supported by 2% service revenue growth and a 0.3 percentage-point improvement in Ebitda margin amid cost savings initiatives, he reckons. However, 2027 core earnings could fall 3% due to the full-year impact of its stake in Malaysia's state-backed 5G infrastructure firm Digital Nasional, he adds. CIMB maintains a buy rating on Maxis and keeps target price at 4.35 ringgit. Shares are unchanged at 3.70 ringgit. (yingxian.wong@wsj.com)
2104 ET - Baby Bunting appears to have attractive capital deployment options for years to come, Morgan Stanley analysts say. They tell clients in a note that the Australian retailer's decision to invest A$45 million in fiscal 2026 capital expenditure paid off, with sales at its refurbished stores up 18%. Margins are wider and leverage is improved, they add. They point out that fiscal 2027 investment is being managed to ensure positive free cash flow. They see refurbishments continuing, albeit with a limit on annual capex. This pushes the rollout of new stores to fiscal 2028 and beyond, they add. MS keeps an overweight recommendation on the stock and cuts its target price 13% to 2.70 Australian dollars. Shares are down 1.6% at A$1.255. (stuart.condie@wsj.com)
2044 ET - Macquarie analysts anticipate another near-term share buyback at QBE Insurance. Last week, the Australia-listed general insurer trumpeted its capital discipline and efficiency, indicating that it could have flexibility to return any excess capital. Macquarie's updated forecasts now include a A$400 million buyback from November. However, the analysts keep a neutral rating on the stock, pointing to the approach of the North American hurricane season and a strengthening U.S. dollar. The investment bank trims its target price 2.1% to A$23.40. Shares are down 0.7% at A$22.93. (stuart.condie@wsj.com)
2030 ET - National Australia Bank's updated forecasts make it the most bearish of the country's major banks on housing credit, Citi analyst Thomas Strong observes. NAB's assumption of 2.5% housing-credit growth in fiscal 2027 compares with Strong's forecast of 3.5%, and sits below the 4%-5% flagged by the other three major retail banks. The difference, Strong assumes, is NAB's expectation that investor credit growth will shrink by 1.4% in the period. More positively, NAB's forecast of 7% business credit growth is consistent with Strong's expectation. Citi has a last-published neutral rating on the stock and a target price of 38.00 Australian dollars. Shares are down 4.1% at A$39.69. (stuart.condie@wsj.com)
2020 ET - The Nikkei Stock Average rose 0.5% to 69086.56 in early trade, aided by preliminary estimates showing weaker-than-expected 2Q GDP growth. The weaker print could prompt the Bank of Japan to hold off raising rates as soon as next month. Japan's 2Q real GDP grew 0.3% on-quarter, missing economists' estimate for 0.5% growth. "The details were a mixed bag," says Marcel Thieliant, head of Asia-Pacific at Capital Economics, in commentary. Among top performers on Japan's Topix, non-ferrous metals sector rose 2.9% and marine transport sector added 1.8%. The dollar is at 159.14 yen, compared with Y159.30 late Friday in New York. (ronnie.harui@wsj.com)
2016 ET - BlueScope Steel's 1H FY27 earnings before interest and taxes, or EBIT, guidance of 860 million to 960 million Australian dollars is above consensus of A$812 million "but lower than some estimates and implied spot scenarios," says Barrenjoey. The steelmaker's 2H FY26 EBIT of A$716 million is slightly above the top end of guidance of A$620 million-A$700 million, and 3% above consensus, Barrenjoey says. The Australian bank expects comments from management, particularly on Australian Steel Products and North Star, could drive the stock Monday. Shares are down 2.3% early in Sydney at A$32.92. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
2013 ET - ANZ's reignited growth ambitions raise questions at Macquarie over the resilience of the Australian lender's margins. Analysts at the investment bank point out that ANZ's softer June-quarter revenues are a result of it only returning to lending growth late in the period. This write that this growth in mortgages and business lending may come at the cost of margins. However, they note that ANZ has focused to date on investor and interest-only lending, which may limit near-term margin compression. Overall, they see ANZ executing more strongly than expected on its cost-reduction program in a challenging revenue environment. Macquarie keeps a neutral rating on the stock and raises its target price by 3.1% to 33.50 Australian dollars. Shares are down 1.5% at A$38.32. (stuart.condie@wsj.com)
2002 ET - National Australia Bank's third-quarter earnings miss could be forgiven by investors, Citi analyst Thomas Strong says. NAB's June-quarter cash earnings were in line with Citi's forecast, but about 2% below consensus. However, Strong points out in a note to clients that markets and treasury income appears to be the driver of the miss. From looking at group revenue and NAB's margin disclosures, he estimates that markets and treasury revenue fell by 10% in the quarter. This is a function of volatility, and the market should look through the miss, he says. Citi has a last-published neutral rating on the stock and a target price of 38.00 Australian dollars. Shares are at A$41.37 ahead of the open.
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