0042 GMT - The key short-term focus for those watching Life360's Australia-listed stock is whether it secures entry into the country's S&P/ASX 100 stock index, according to the tracking-app provider's bull at Bell Potter. ASX 100 stocks are the largest by market capitalization, and the most liquid. Inclusion in the index increases a company's exposure to fund managers and other investors. Analyst Chris Savage tells clients in a note that he sees a lot to like in the company's 2024 result, while subscription revenue seems set to rise by more than 25% again in 2025. Bell Potter raises its target price by 0.9% to A$28.00 and keeps a buy rating on the stock. Shares are down 1.0% at A$23.07. (stuart.condie@wsj.com)

0023 GMT - Life360's bulls at Morgan Stanley see an easy way for the tracking-app developer to keep investors' earnings expectations in check. Citing the company's expansion into pet tracking, MS analysts tell clients in a note that they would like to see Life360 flag proactive reinvestment in accelerating its stated goals. They currently reckon that a US$8.0 million reinvestment into the pet launch late in 2025 will limit operating leverage. Still, they keep an overweight rating on the stock, saying that strong advertising revenue seen late in 2024 should annualize and grow through 2025. MS lifts its target price on Life360's Australia-listed stock by 14% to A$28.60. Shares are up 0.6% at A$23.43. (stuart.condie@wsj.com)

2332 GMT - Vehicle-parts distributor Bapcor has much work to do but has probably reassured the market on the relative defensiveness of its core trade segment, UBS analyst Tim Piper says. He tells clients in a note that confidence looks to be growing that Bapcor's trade segment is positioned to benefit from a rebound in after-market activity following a period of relatively subdued demand. Retail and specialist-wholesale segment conditions are more challenging, but Piper points out that Bapcor is positioning one retail business for divestment, and that one wholesale business has already been sold. UBS is unrated on Bapcor. Shares are flat at A$5.15. (stuart.condie@wsj.com)

2300 GMT - Eagers Automotive's 2H performance looks strong to UBS analyst Tim Piper given tough vehicle retailing conditions in Australia. Piper also reckons that Eagers' margin resilience looks especially good compared with the performance of the company's peers. He tells clients in a note that Eagers' scale, exposure to Toyota and hybrids, and distribution agreement with China's BYD all helped to differentiate the company from its rivals. Piper thinks the share-price surge that followed the release of its annual result is probably a short squeeze, but that Eagers's positive outlook has likely reassured investors that downside risk is now limited. UBS lifts its target price 40% to A$14.80 and stays neutral on the stock, which is at A$14.99 ahead of the open. (stuart.condie@wsj.com)

2258 GMT - Dicker Data's bull at UBS sees upside risk to his sales forecasts from a recovery among Australia's small- and medium-sized enterprises. Analyst Apoorv Sehgal tells clients in a note that he currently sees the computer hardware and software wholesaler recording 7% annual sales growth across 2025. This is supported by demand for new AI-capable PCs and follows the pickup in spending by small- and medium-sized businesses seen in the most recent December quarter. Sehgal sees stable cost margins through 2025, although there might be some potential for leverage. UBS lifts its target price 2.0% to A$10.20 and keeps a buy rating on the stock, which is at A$8.41 ahead of the open. (stuart.condie@wsj.com)

2230 GMT - Life360's track record suggests the tracking-app developer's 2025 outlook is likely to prove conservative, Goldman Sachs analysts reckon. They point out Life360 is typically conservative when setting initial guidance, which suggests upside to the company's current expectation of US$450 million-US$480 million in annual revenue and US$65 million-US$75 million in adjusted Ebitda. They like Life360's ability to lift active users in the December quarter, a period that is typically softer due to seasonal factors. GS lifts its target price 8% to A$27.00 and keeps a buy rating on the company's Australia-listed stock, which is at A$23.30 ahead of the open. (stuart.condie@wsj.com)

2223 GMT - Deterra Royalties is likely to spend less cash reducing its debt load, and more on investor returns, according to UBS analyst Lachlan Shaw. In a note, Shaw says UBS no longer expects Deterra will deleverage its balance sheet as fast as possible. That follows a higher 1H payout ratio, at nearly 75% of profit. Deterra also has a longer revolver maturity than previously assumed and its Trident gold royalty is better than expected, covering net interest costs comfortably, says Shaw. Consequently, UBS now expects a 75% payout near term, in line with the 1H dividend and above a prior payout ratio of 50%, he says. Yet a revised, higher cost of capital prompts a cut in UBS's target on Deterra to A$4.20/share, from A$4.90 previously. It retains a buy rating. Deterra ended Friday at A$3.59. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2221 GMT - Dividends could soon be on the table from life insurer Noble Oak, reckons Barrenjoey. Noble Oak beat expectations with 1H underlying net profit growth of 11%, reflecting improved margins in Strategic Partners and Genus. "Noble Oak is now at a tipping point where policy cash flows turn positive in coming years," says analyst Nick McGarrigle. That means it won't need to raise capital to fund growth from its existing businesses and could start paying dividends. "A 30-50% payout implies a 4-7% fully franked yield for FY 2026," says Barrenjoey, which isn't yet ready to assume dividends in its model. (david.winning@wsj.com; @dwinningWSJ)

2216 GMT - Investors now understand and have priced in Bellevue Gold's operational difficulties of 2024, says Barrenjoey, upgrading the miner to neutral, from underweight. Bellevue Gold's share price has declined some 35% since July, underperforming the gold price and the ASX Gold Index, and analyst Daniel Morgan thinks operational delivery will be the key debate over the next 12 months. Investors will look for evidence that the mine turned the corner on both mining volumes and grade. "We think there are signs of improvement in development meters which should, with a lag, lead to better mining outcomes in 2025," Barrenjoey says. (david.winning@wsj.com; @dwinningWSJ)

2213 GMT - TPG Telecom's accelerating decline in post-paid mobile subscribers keeps Goldman Sachs analysts bearish on the stock. They are positive on what they say was strong cash generation across 2024, but tell clients in a note that the Australian company's weak 2H post-paid performance is a concern. It looks especially bad given that it came at a time when rivals had lifted their prices, the analysts add. Goldman Sachs keeps a sell rating and A$4.20 target price on the stock, which is at A$4.63 ahead of the open. (stuart.condie@wsj.com)

2206 GMT - Service Stream's renewal of a key contract with NBN Co. helps to persuade Ord Minnett to upgrade the stock to buy, from hold. Service Stream says the contract is worth A$1.9 billion over an initial five years. "Confirmation of the agreement de-risks the near-term earnings outlook/forecasts," analyst Ian Munro says. Service Stream appears to have now re-signed all major and material customer agreements that were scheduled to roll over within the medium term, Ord Minnett says. "With more evidence of top line growth and margin expansion in the Utilities segment, and steady growth in the Transport segment, the earnings trajectory for Service Stream is positive for the second half and into FY 2026," Ord Minnett adds. (david.winning@wsj.com; @dwinningWSJ)

2201 GMT - The biggest near-term bottleneck for rare-earths miner Lynas is the market, says UBS analyst Dim Ariyasinghe. In a note, Ariyasinghe says UBS is not concerned about Lynas's balance sheet. Rather, "focus remains on the market and, with it, Lynas's ability to increase capacity utilization." Prices are improving, albeit more slowly than UBS would have liked, says Ariyasinghe. Next, the market will be watching China's 1H production quota, which is expected within weeks. UBS has a buy rating and A$7.95/share target on Lynas. The stock ended Friday at A$6.79. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

2152 GMT - Supply Network loses a bull in Ord Minnett despite an upbeat 1H result featuring an 18% rise in sales and more market share gains. Ord Minnett downgrades Supply Network to accumulate, from buy, citing the stock's strong share-price performance recently. Despite that downgrade, analyst James Casey remains confident that Supply Network is on a pathway to more growth. "We forecast double-digit EPS growth in the next three years," says Ord Minnett. "We also expect further improvement in Supply Network's return on capital employed in FY 2025 and FY 2026, as the company leverages recently opened facilities and branches." Supply Network's share price is up some 25% since late November. (david.winning@wsj.com; @dwinningWSJ)

2144 GMT - UBS equity analysts don't think shares in Qantas have further to rise, even though the airline's 1H result suggested pretax profits would be up 14% in FY 2025. They lift their target price to A$9.30/share from A$9.00, but argue the share price "appropriately reflects a valuation discount for Qantas's stage in its capex cycle" and that the stock isn't obviously undervalued anymore. Still, UBS believes things are looking up, saying they expect costs to be contained as capacity growth stabilizes, on-time performance to improve and that there will be benefits from a transformation program and fleet renewal. Demand also appears relatively resilient. Qantas closed Friday at A$9.52, up from A$8.89 prior to its 1H result. (mike.cherney@wsj.com; @Mike_Cherney)

2140 GMT - Strike Energy may have plenty of potential but Wilsons wants more clarity on the strategic direction of the company. In particular, Wilsons has become less bullish about the near-term output of Strike's Walyering gas plant. Analyst James Karakatsanis now expects flat production from Walyering, having previously forecast it to rise. "We think it is prudent to gauge new management (interim and incoming) before taking a view of the productive capabilities of the Walyering gas plant," says Wilsons, which rates Strike a buy. (david.winning@wsj.com; @dwinningWSJ)

2127 GMT - Coles bull UBS says the Aussie grocer has a leg up on its chief rival Woolworths, pointing out that Coles's sales growth of 3.4% to start 2H is ahead of Woolworths's growth of 3.3%. Cost-of-living pressures are prompting consumers to shop more online and seek out more promotions, but UBS tells clients that Coles is managing the shift well, with Coles optimizing promotions and range better than Woolworths. UBS boosts its target price on Coles to A$22.35/share from A$19.50/share, compared to Friday's close of A$19.98/share. (mike.cherney@wsj.com; @Mike_Cherney)

(END) Dow Jones Newswires

March 02, 2025 22:58 ET (03:58 GMT)

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