0439 GMT - GenusPlus's bull at Bell Potter sees potential for the stock to further re-rate even after its strong start to fiscal 2027. With an unchanged buy rating on the stock, analyst Joseph House reckons that the Australian powerline construction company is modestly valued at 19.1 times estimated fiscal 2027 earnings. He tells clients in a note that he can see a multiple of between 22 and 24 times earnings if GenusPlus upgrades its guidance, maintains its strong pipeline conversion, or engages in more M&A activity. Its current fiscal 2027 guidance looks conservative to House, who holds his target price at 12.80 Australian dollars. Shares are down 4.2% at A$9.265. (stuart.condie@wsj.com)
0429 GMT - Helloworld is materially undervalued and patient investors should be rewarded when the global travel industry eventually rebounds, Morgans analyst Belinda Moore says. With an unchanged buy recommendation on the Australian travel agent, Moore looks past the ongoing Middle East conflict and its associated uncertainty to a time when it can leverage the structural tailwinds favoring leisure travel. "Its target market is becoming wealthier, living longer and traveling more," she writes in a note. Moore adjusts her forecasts following Helloworld's acquisition of Crown Currency Exchange to account for modest EPS accretion from fiscal 2028. Morgans raises its target price by 2.8% to 2.24 Australian dollars. Shares are down 0.4% at A$1.37. (stuart.condie@wsj.com)
0416 GMT - Mining shares and mined commodities tend to outperform when the yield curve steepens, and underperform when it flattens, says Jefferies. "This holds true across physical copper, gold, silver, and platinum, as well as copper and gold equities," the bank says. By comparison, the S&P 500 tends to perform best when there is no clear trend, it says. Jefferies says this poses a risk for the mining sector ahead. "We seem to have exited the bull steepening of the past two years and may be heading for bear flattening, where yields rise and spreads compress," it says. "History suggests a headwind for mining, with copper faring best" and iron ore the worst, says Jefferies. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0220 GMT - Premier Investments' bull at Macquarie sees little chance of the stock rerating until broader consumer pressures ease. The investment bank's analysts tell clients in a note that shares in the Australian retail conglomerate show value at just 4.1 times Ebit. However, they think the tough consumer environment created by high interest rates and elevated inflation probably needs to improve before the stock can deliver on that. For now, they reckon that the key issue for Premier is delivery on its turnaround plans for stationery chain Smiggle. The trading performance of the stores' new products will be more measurable from November, they add. Macquarie keeps an outperform rating on the stock with a target price of 15.70 Australian dollars. Shares are down 1.2% at A$11.81. (stuart.condie@wsj.com)
0212 GMT - Premier Investments keeps its bull at UBS despite execution risks around the strategic reset of its chain of stationery stores. Maintaining a buy rating on the stock, analyst Shaun Cousins tells clients in a note that the retail conglomerate will implement its plan for Smiggle over the coming months, moving the chain's focus to the 6-12 year-old age group, from the 4-8 year-old cohort. Cousins sees potential difficulty in reestablishing the brand and building its credentials with the older children in its target group. He also warns of increased competition across existing and new product categories, as well as the challenging consumer backdrop. UBS has an unchanged target price on the stock of 16.50 Australian dollars. Shares are down 1.5% at A$11.77. (stuart.condie@wsj.com)
0205 GMT - Delivering new, large-scale copper supply will likely be more costly, slower and riskier than anticipated, says Jefferies. That justifies higher copper prices and reinforces the case for miners to buy copper growth, rather than building new mines, in some instances, it says. In a review of major projects, the bank found many failed to deliver the production volumes expected when a final investment decision was made. A "combination of capex inflation and production underperformance suggests that industry forecasts may systematically overestimate the amount of copper supply likely to be delivered from greenfield projects and underestimate the true incentive price to build new mines," Jefferies says. "The implications for copper supply are significant" and support premiums increasingly being assigned to some operating mines, brownfield expansions and "derisked" development assets, it says. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)
0003 GMT - Premier Investments keeps its bull at Bell Potter despite the prospect of a period of slow growth over the near to medium term. With an unchanged buy rating, analyst Chami Ratnapala keeps her forecasts largely unchanged following the Australian retail conglomerate's annual result announcement. She is waiting on positive signals from Premier's Smiggle stationery business following a brand refresh, and anticipates an earnings recovery in the second half of the current fiscal year. Ratnapala sees Premier's forward multiple as attractive given the strength of the company's retail operation, its equity investments, land bank, and cash position. Its strong balance sheet would support M&A, she adds. Bell Potter trims its target price by 6.1% to 15.50 Australian dollars. Shares are down 2.1% at A$11.70. (stuart.condie@wsj.com)
2356 GMT - IAG's bulls at Citi say the Australian insurer's settlement with Credit Suisse represents a welcomed end to a long-running stock overhang. With IAG saying the settlement won't have a material impact on its financial position of fiscal 2027 results, analysts at the investment bank tell clients in a note that the insurer appears to have resolved the issue for a relatively minimal amount. They welcome the announcement since the continuing legal case may have prevented some investors taking a position. Citi has a last-published buy rating on the stock and a target price of 8.80 Australian dollars. Shares are at A$7.80 ahead of the open. (stuart.condie@wsj.com)
2348 GMT - Tuas's bull at Citi is growing more confident that the Singapore-focused telco will keep its mobile license. Analyst Siraj Ahmed lowers the probability from 20% to 10% that Tuas's Simba subsidiary loses its license due to its unauthorized spectrum use. His base case remains that Simba will keep its license but pay some kind of penalty. Despite the possibility of a more adverse regulatory outcome, Ahmed keeps a buy/high risk rating on the stock. He lowers his revenue forecasts, telling clients in a note that recent slower-than-expected subscription growth is unsurprising given competition and regulators' attention. Citi lowers its target price on the stock by 12% to 2.95 Australian dollars. Shares are at A$1.79 ahead of the open. (stuart.condie@wsj.com)
0458 GMT - The outperformance of Zip's U.S. business relative to the Australian payment provider's home market appears to have continued in August, according to UBS analysts. They point to recent app download data, which shows U.S. app downloads improved sequentially from July to sit 11% higher than a year earlier. At the same time, Australia app downloads were up just 1% on year. They tell clients in a note that the regions' monthly active user trends are even further apart. Monthly active users for August were up 4% on a 12-month basis in the U.S. but down 15% in Australia. The UBS analysts only highlight the data, stopping short of sharing any firm conclusions with clients. UBS has a last-published buy rating on the stock, which is down 12% at A$1.975.
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